COMPANY TAXATION.

Taranaki Daily News, 2 September 1921, Page 8

COMPANY TAXATION.

QUESTION OF INCIDENCE.

MINISTER’S ATTITUDE.

On being shown the statement by the acting-Minister for Finance. Sir Francis Bell, in regard to company taxation, which he made at Auckland on Friday, Mr. J. A. Frofitick. of Christchurch, said that, with regard to the first point raised by the Minister to the effect that a change in the incidence of taxation from companies to shareholders was in his opinion quite impossible, it should be no more difficult here than it was in any other country to obtain taxation from individuals according to their ability to pay.' “Was not the real cause for the disinclination of the Government to make an alteration the one alleged to have, been mentioned by Mr. Mass<.y last year, when he. said it would mean n loss of £BOO.OOO in revenue:” Mr. Frostiek -as a'sked.

“1 cannot vouch for these figlwes.'* he replied, “but I have reason Io believe that is what the Prime Minister said to « deputation when the subject was dis,-cn-st'd in Wellington about a year ago. The changing of the incidence of taxa-i i.ion from companies to individuals may hove some difficulties, but certainly it will not be the most difficult problem the Government will have to face in th? immediate future. They can do it if thev like.

“With regard to the other points of Sir Francis Bell’? remarks as between large and small idiarehoklers, the M’nister’s opinion from the point of view of the former is no doubt quite corn -t. Few people would desire to see their taxation raised. With regard to the small shareholders, his reasoning for their desiring to invest and be content with small dividends i-s ingenious. It must bo perfectly clear that where companiei- have to pay an enorm'ous percentage of the total earnings in income tax tlie small shareholders would be. prepared to take the, risk of supporting a change in taxing from eomnany io • individual, because 4 of the sraallneas of 1 : their incomes.

"Ono or two days ago I stated publicly that the taxation paid by the Kaiapoi Woollen Company for the year ended .June, 1929, represented (Hi per cent, of the entire net earnings of the company, or, in other words, for every ;C1 paid in dividends to shareholders, ;E1 7s 3d was claimed by the Government for income tax alone, to say nothing of land tax and other rates. ‘While Sir Francis Bell may be speaking within the truth when he flays that there has been no agitation by small shareholders for a change, it. is simply because of the hopelessness of getting any relief owing to the statement that has gone forth that the Government coulcTnot a fiord to lose I revenue by changing the incidence from I companies to shareholders, and thus perpetuates an admittedly unjust system. iTo say in a case where the Government claims 66 per cent, of the entire earnings that dividends would <not be increased provided the income tax on companies was removed is a fair stretch of imagination anyway.”