PENALTIES ON ENTERPRISE.

Wairarapa Times-Age, 10 September 1938, Page 6

PENALTIES ON ENTERPRISE.

ACCORDING to the Minister of Finance (the Hon W. Nash) a number of people are taking advantage of the company taxation system to avoid paying tax in the ordinary way. In the debate in the House of Representatives on the clause in the Social Security Bill making companies liable to the social security levy of Is in the pound on the whole of their net profits, the Minister said there were at least five methods by which people evaded the payment of taxes which were due and the clause was calculated to make them meet all their obligations. Any attempt to evade taxation duly imposed undoubtedly ought to be dealt with drastically, but it is most essential in the national interest tliat whatever punitive measures are taken should be just and equitable. Particularly it is necessary that they should be directed against offenders and not against productive enterprise in general. References to tax evasion, are not a reply to criticism which declares that lhe Government, having maintained taxation at a level at which desirable business and industrial enterprise is most unjustly penalised and checked, is now making an intolerable addition to the burden. As Sir W. D. Hunt pointed out, at the representative meeting held in Wellington on Thursday, the imposition of the social security levy on companies extends the practice of what may be called multiple taxation —that is to say of requiring the payment of taxes on what has already been paid in taxation. For the moment there are presumably no means of inducing the Government to modify its taxation policy, but the position as it stands obviously deserves the serious attention, not only of company shareholders, many of whom are people of moderate means, but of all who are alive to the wisdom and necessity of affording reasonable scope for business and industrial expansion. If it is agreed that companies are playing a useful and necessary part in the economic life of the Dominion, it is not easy to see how the interests of the community are to he served by loading them with such burdens of taxation as are now being imposed. Apart from the manifest injustice of taxing the same income more than once, it is hopeless, while companies may be called upon to hand over more than half their net income in taxation, to expect the free expansion of productive enterprise by which all sections of the community would benefit