SECURITY TAX

Wairarapa Times-Age, 2 September 1938, Page 5

SECURITY TAX

COMPANIES TO PAY AS WELL AS INDIVIDUALS AMENDMENTS TO BILL INTRODUCED. WAR PENSIONERS & PROVIDENT FUND. (By Telegraph—Press Association.) WELLINGTON, This Day. A long list of amendments to the Social Security Bill was introduced by Governor-General’s message toward the close of the sitting of the House of Representatives last night. The supplementary order paper containing the amendment was itself almost the size of an ordinary Bill. A new clause makes companies liable for a charge on income on. the same lines as the social security contribution on private incomes. Other provisions of importance affect the rights of war pensioners and National Provident Fund contributors under the Bill. The clause in the Bill which makes special provision with regard to war pensioners is extended so that it will safeguard the position , of ..war pensioners who may claim age, sickness or unemployment benefits under the Bill. The applicant will be able to receive an age benefit in addition to a war pension of 17s 6d a week, making a maximum double benefit of 47s 6d a vzeek. Special provisions are also included with respect to' certain classes. of applicants for age or widows’, benefits who are in receipt of benefits from the National Provident Fund. The classes comprise persons who were contributors to the fund before the passing of the National Expenditure Adjustment Act, and widows whose husbands were' contributors to the fund after January 1,1927, and before the passing of that Act. If persons in either of these classes apply for benefits under the Social Security Bill, the commissioners are empowered to grant them the highest rate to which they would be entitled. A new clause imposes a liability on companies for a charge on, income. Taxation will be levied at the rate of Is in the £1 on the chargeable income of the company, which, with minoimodifications, is the income assessable for income tax. Exemption from the payment of the tax may be allowed to particular classes of companies by Order-in-Council. Definite exemptions are allowed in the case of companies engaged in gold mining, scheelite mining, life insurance, banking, and petroleum mining. Dividends from these companies will be taxed in the hands of shareholders.

The charge payable by any company on its chargeable income for any year will be due and payable on dates to be determined by Order-in-Council. It is specifically stated that taxation will be levied in the same manner as it is in on individuals other than companies.

In addition to the tax on the chargeable incomes of companies, which is regarded as a tax on profits, there is provision for taxation on profits which may be distributed to shareholders by non-taxable companies. Dividends in the hands of a shareholder received from a company liable ,to the social security charge will be exempt from tax, but anything in the nature of bonus shares or debentures or distributed profits will be regarded as dividends. If a company is liquidated and shareholders receive more than they paid up, the excess amount will be liable to tax.

Other minor provisions in ' the amendments safeguard the position of persons who may be in receipt of two pensions or a pension and an allowance. It is provided that under the Bill they will not receive less than they are receiving at present. Another clause deals with the position of contributors to the National Provident Fund who may be entitled to a benefit of £6 on the birth of a child. This allowance will not be payable if th'e full maternity benefits under the Bill are received. Power is also given for the payment of preliminary expenses from the Consolidated Fund in order to cover administrative costs before the scheme actually commences operation.