TAXATION OF COMPANIES.

Wairarapa Daily Times, Volume XII, Issue 4006, 7 January 1892, Page 3

TAXATION OF COMPANIES.

Tbo following is t-hu correspondence which appeared in the Christchurch Press recently (TO TilE EDITOR OF THE I'IIESS). Sir,—ln reference to your leader of the 9th instant 1 should bo glad if you will publish at foot hereof tbe enclosed copy of a letter from the Commissioner of Taxes to the Northern Investment Company of New Zealand (Limited), whiuli 1 have just received from the manager of the company with permission to publish, This more than bears out my view of the'amount of taxation to bo paid by the non-privileged companies, Your waders will see that the , commissioner claims;— Ist, One penny in the £ on the. registered mortgages on land, i.e., one Ibenny per £ on £476,921. " 2nd. Income tax at Is in the pound on the interest ai £5 per cent, on the debentures issued in England, viz,, beini! a part of the previous sum on which the mortgage tax is claimed, But to my astonishment the commissioner is not satisfied with this. Like Oliver Twist, he asks for more. The Act, as interpreted by the commissioner, is more severe on these companies than I had supposed. 3rd. The commissioner you will observe, also claims Is in the pound income tax on £11,285, being tho net profits made by the company, My examination of their balance sheet shows me that the whole of their not profits, or all but a very trifling sum, are made out of the mortgages already taxed twice, as shown above. I thought the effect of the act as interpreted by me was quite bad enough. Eow much worse it is if tho commissioner's view • is correct I However, I think it will bo found jfet the commissioner ia wrong as to demand, The only doubt I have on the subject is as to which of them—the commissioner or Mr Ballance—is the more ignorant as to the operation and effect of the act.— Yours, etc., AuthurE. G. Rhodes,

Property Tax Department, Wellington, 2nc' December, 1891, The Publio Officer, Northern InvestJ ■ raent Company of New Zealand, Ltd., Napier. Sir,—l have the honour to acknowledge the receipt of yours of the 19th ultimo, and to apologise for the delay that has unavoidably arisen in •replying to it, Forms were posted to the com., pany's address on the 20th ultimo, and have doubtless been received in due course. Under the Land and Income Tax Act of 1891 the company will he taxable on its funds invested in land or in mortgages of real property, and reigns must he sent giving a detailed element of each, Wool liens will not bo treatod as mortgages, It will, therefore, not be necessary to return interest accrued, inoney deposited with a bank, or office furniture. Isend you aslateinent, as requested, compiled from tlie balance sheet sent by you and from the balance sheet of 80th June, 1800, Tfce debenture interest has been calculated at 5 per cent. Yours Obediently, John M'Gowan, Pro Commissioner, Nobihebn Investment Company or Kwv Zealand (Limited), LAND TAX. £ I £ On real prop'ty Nil On mortgages 470,921 nt Id 1957 3 o Graduated tax | Nil INCOME TAX, £ £ X J! FilmU imrest'd 182,979 ,Jjfty*pital 100,000 381, GJ2 at 57, 19,082 at 1b 95-1 2 0 Not Profitsll,23s at Is 56115 0 l_ 3503 0 5 Except for graduated land tax the rates are to bo annually fixed