TAXING LOCAL BODIES.

Taranaki Daily News, 25 August 1922, Page 6

TAXING LOCAL BODIES.

SHOULD HARBOR BOARDS PAY’ NEW PLYMOUTH SAY’S ‘ YES." The question of the imposition of in-come-tax on local bodies came under discussion at yesterday’s meeting of the New Plymouth Harbor Board. The chairman (Mr. C. E. Bellringer) moved that the board strenuously oppose the imposition of the tax on local bodies. If the tax were imposed upon Harbor Board land, which was benefiting the public generally, it should be also imposed on Government land. It was not a fair proposition to tax them. The Harbor Board was using its land for public utility and not for making any profit. He could not see that any practical effect would be obtained by the imposition of the tax, as it would have to be passed on to the public again. At the proposed rate the tax would take one-third of the revenue from their land. Of necessity, Harbor Boards must hold large areas of land as a public utility, and in taxing the revenue from this the tax was not serving the purpose for which it was designed. Mr. E. Maxwell seconded the motion. He said they must not overlook the fact that the Harbor Board reserves were set aside as security for loans raised, and if a tax were imposed upon the revenue derived from them they would be depreciated in value. The tax would not be so severe at present, but in the near future they hoped to develop the reserves and the tax would go up. Mr. C. A. Wilkinson opposed the motion. He was surprised, he said, at the infinite variety of arguments tfiat would ’be raised to dodge taxation. It was well known that taxation was crushing the life out of the public. The Harbor Board was a comparatively wealthy body—the wealthiest in Tarafiaki. It was squealing and trying to avoid a tax of £7OO or £BOO a year. The board had £63,000 worth of land on which it was trying to avoid taxation at the expense of the general public. He thought they should do their share to meet the financial difficulties of the country.

Mr, J. McCluggage also protested that the board was a wealthy body and should not avoid taxation at the expense of the farmers, who would have to pay the greater part of the taxes, and thty were overburdened.

Mr. Bellringer said his intention was to protect the struggling farmer. If the board was taxed it would have to pass it pn to the goods handled, and thus it would get back to the farmer and the public. In answer to previous dicussion, he said he would be prepared to put an increase of 2s per ton on the charges on Government coal, because the Government used the board’s wharves and machinery, and thus received a definite service which should he levied against. The Harbor Board was doing a part in the government of the country, and as such should be exempt from taxation.

The motion was then put to the meeting and lost by five votes to three.

Other taxation questions were brought before the board's notice by the Harbors Association of New Zealand, and following resolutions by that body were agreed to on the principle affirmed by the loss of the chairman’s motion:/

(1) That all lands owned by local bodies and leased for revenue purposes to persons, firms or companies, should be subject to land tax on the same basis as privatelyowned lands.

(21 That interest received from investment in debentures of public bodies and companies should be 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) That income-tax, equivalent, approximately, to the average rate paid by companies. be paid by all public bodies and Government trading and publicly-owned utility undertakings, and the tax arrived at by assuming income based on a fixed percentage of the total amount of capital employed.

DISCUSSION AT WELLINGTON. CHAIRMAN CONDEMNS PROPOSAL. By Telegraph.—Press Association. Wellington, Aug. 24. Mr. Harkness, chairman of the Harbor Board, strongly condemned the suggestion by the Taxation. Committee thht lands owned by local bodies should be taxed. Their position was quite different from that of lands privately owned. What was the use of a harbor board reclaiming land from the sea if it was to be confiscated by taxation? These and lands gnen by way of endowment were for the express purpose of producing revenue and easing the charges. The reveit:® earned by Harbor Board land was £12,000 yearly, and it would have to pay £ll,OOO in taxation, so that practically all the benefit would be lost from it. One or two members saw no objection tn the committee’s proposals, but others strongly condemned them. One suggested that they could stand taxation if Government departments paid for work now gratuitously done for them. The chairman mentioned the privileges claimed by the Government, no wharfage, storage or harbor dues, and so on. It was eventually decided to discuss the matter further at the next meeting.