TAXATION REPORT.

Taranaki Daily News, 18 August 1922, Page 5

TAXATION REPORT.

EFFECT ON HARBOR BOARDS. LAND TAX SUGGESTED. The effect of the recommendations of the Taxation Committee, if carried into law. upon harbor boards was brought before the notice of the N**w Plymouth Harbor Boar*’ -t vesterdav’s meeting in a circular letter forwarded by the secretarv of the Harbors’ Association of New Zealand. The clauses to which attention was drawn were:—(l) Land tax: Local bodies owning endowment and . other lands pav no land tax. and this appears wrong in principle. If these lands eaeane it means that higher rates have to be paid on other lands to bring in the neces='”'v revenue. There appears to be no reason whv local bodies, when thev lea«e these lands and obtain revenue from them, should not . pav land fax in the same manner as private owners It was unanimonslv resolved that all lands owned bv local bod’es and leased for revenue purposes to persons, firms or companies should be subject to land tax on the same basis as privately own«l lands. (2) Tax on debentures: The committee had xmanimouslv resolved that interest received from investment in debentures of public bodies and companies should ba taxed at the same rate as that from other sources and the separate assessment under sub-section (3) of section 112 of the Land and Income Tax Act 1916 should be abolished. (3) Taxation on Government and local body trading concerns: The committee resolved that income tax. equivalent approximately to the average rate paid by companies; be paid by all public bodies and Government trading and publicity owned utilitv undertakings, and t ■» tax arrived at bv assuming income based on a fixed percentage of the total amount of capital employed. The letter concluded: “It seems clear that if anv of the above cited clauses are embodied in legislation the result will be serious to harbor boards, and the president of the association has instructed me to object to these clauses on behalf of the association. In view of the importance of the proposals, however. I am directed to suggest that each board should also make protest to the Government, either direct, through its district M-P.’s, or both, against any alteration being made in the respective exemptions now enjoyed by bo Js in regard to (a) land tax. (b) debenture tax limitation of 2s 6d per £ and (e) ordinary income tax. I therefore desire to bring these proposals under the notice of your board and at the same time would point out that any protest decided on should be made without delay.” Discussing the first clause the chairman said this recommendation was very serious for harbor boards if they had to pay land tax on all reserves. It opened up the principle that Government land vested in local bodies should pay land tax. Mr. Wilkinson was inclined to think that the recommendation of the taxation committee was a sound one. This view was supported by Mr. Burgess, but Mr. Maxwell differed. He contended the levy would be stupendous, as no limit could be placed upon it. It would absolutely destroy local finances. He urged that the measure should be resisted. Mr. Wilkinson pointed out that the harbor board was competing with land owners who had to pay tax. The board should pay the fair share of the tax the community had to pay- He thought Mr. Maxwell was raising a bogey when he asserted the tax would be crushing to the board. Mr. King did not think that Mr. Wilkinson’s contention that the board was in competition with private land owners was quite correct as far as paying taxation was concerned. The chairman pointed out that the Gcrvpmment had gained on all hands by reason of the harbor. Otherwise the whole of the lands in the district would certainly have been very much less in value. Regarding the other clauses Mr. Wilkinson said he agreed with the principle in these also, as all the community should be put on the same footing. The chairman moved that the board strenuously oppose the imposition of land tax upon the board's reserves. This was seconded by Mr. Maxwell, but Mr. Burgess moved as an amendment that the Tna.t tfr be deferred till next meeting so that the board could get an idea as to what the tax would cost. This Mr Connett seconded. The motion was withdrawn after discussion, and the board decided to defer th(> matter for » month.