INCOME TAX DEMANDS

Taranaki Daily News, 19 February 1921, Page 10

INCOME TAX DEMANDS

PROPOSALS FOR RELIEF. COMMISSIONER’S PLAN. The following memorandum regarding the payment of income tax has been iaused by the secretary of the Association of New Zealand Chambers of Commerce to the affilia-letl .cliapiberß’:

ft ln pi’der primarily to assist importers who are possibly .financially embarrassed owing; to rthe heavy stocks which are generally beiijg,carried, the Commissioner of Taxe§ is prepared, subject to prior arrangernent between the taxpayer and himself, to permit the payment 1 ' of income tax, which is due this month, to be made in the following manner:— “1. Half the amount of the income tax payable to be paid on due date. “2. The balance can be paid by one bill at three months or by two bills at three and six months.

“To the amount of tax represented by the bills is to be added. 15’ per cent, penalty, the bank charges, stamps, etc., and there is to be included in the bills an amount to cover the discount of the bills at 6A per cent, and exchange on bills payable elsewhere than at Wellington; in other words, the bills are to be of such an amount as when discounted by the commissioner will represent the amount of taxation and the 15 per cent, penalty. The commissioner also requires that the bills shall be endorsed by the tax-payer’s bankers. On payment of the bills at due date the penalty tax will be refunded. “This method of payment will be permitted only in those cases where the tax’-payer is unable to find the full amount of income tax himself, or obtain it from his bankers, and only after arrangement has been made by the taxpayer with the commissioner. The association is given to understand that the Government must discount the bills, as it is necessary to bring the revenue into the financial year ending March 31 next, in terms of the Public Revenues Act.

“This method of paying the income K tax will be permitted only in the circumstances mentioned above, and in view of the special conditions obtaining at this time, and is not to be considered as a precedent. It is suggested that chambers of commerce should advise such of their members as are likely to be interested.” FINANCIAL STRINGENCY. A long resolution criticising this proposal has been published by the council of the Canterbury Chamber of Commerce. It recites the causes of an extraordinary financial position, including the delivery of practically two years’ imports in one year, with a consequent increase of taxation through the customs department; the disturbance of the wool market, and the raising of a compulsory loan of £6,000,000. As a result of these conditions, “a very great number of the taxpayers of New Zealand find it practically impossible to pay immediately in cash the income tax now demanded from them.”

The council recalls the proposal by the cpnference of chambers on November 24, that the Government should levy the inome tax in two instalments, on January 31 and July 3 1 , which was submitted to the Prime Minister by deputation on November 26. It now learns “with astonishment and indignation” that the matter “has been left by the Government entirely in the hands of the Commissioner of Taxes,” and "protests against the commissioner’s scheme—(l) Because a responsible and solvent tax-payer should not be forced into the position of a suppliant to any civil servant or public officer, and (2) because the conditions laid down by the commissioner to be imposed on the taxpayer wishing to pay by instalments are usurious.” SPECIAL SESSION PROPOSED. The resolution then proceeds:—“This council therefore urges the Government even at the eleventh hour, to rise to the occasion and to do the right thing in extraordinary circumstances. It points out two obviously simple and alternative courses: (1) To call a special session of Parliament at once to amend the law to permit the levy of the current year’s income tax* in two instalments on February 7 and August 8, 1921, or (2) to accept payment on account of half the income tax payable on the present due date (February 7, J 921), and refrain from proceeding to recover the other half until the matter can be laid before Parliament in June next. TERMS OF THE BILLS. “If the Government, in spite of all the warnings and protests which have been made, resolves to take no action for the assistance of tax-payers other than by reference to the commissioner) of taxes, then this council, with regard to the commissioner's proposals, submits the following amendments as to partial payments of tax by bills:—(1) Taxpayers in all parts of New Zealand should be placed on equal terms, therefore no bank exchange should be charged to them; (2) if the bill is endorsed by the tax-payer’s bankers and includes discount, so that the bill when discounted by the commissioner represents the balance of tax not r paid by cash, then such bill should be treated as cash for its discounted amount, subject of course the right to* sue for penalty in the altogether remote contingency of the bill being dishonored. But the penalty ot la per cent, additional proposed bv the commiss :er should not be added to the original bill. Further, the rate ror discount should not be 6i per cent., but the lower rate for bankers’ best bills having regard to the quantity and quality of the business; and (3) if the bill is not endorsed by the tax'-payer’s banker, it should be treated similarly to a bill so endorsed, except that the reason, able discount for the bill would be higher and that a second and separate security bill for payment of the legal penalty might -be asked for by the commissioner, to be held by him and not discounted and returned to the taxpayer if the first and principal bill is met at due date.”

DEPRECIATION OF SECURITIES. The council also passed a resolution in affirming the necessity for the appointment ol a Royal Commission to inquire into the proper principles of all taxation in Aew Zealand; suggesting that the Land and Income Tax- Act be amended next session to permit of the loss on sale of compulsory-taken 1920 war bonds being treated as a trading expense deductible from income, and affirming the desirability oi the Government taking steps to effect reasonable retrenchment in the administration of the various departments and requesting members of Parliament to make representations in Auction-