LAND-AND INCOME-TAX DEPARTMENT (REPORT BY THE COMMISSIONER OF TAXES.)

Appendix to the Journals of the House of Representatives, 1893 Session I, B-15

8.—15.

1893. NEW ZEALAND.

LAND-AND INCOME-TAX DEPARTMENT (REPORT BY THE COMMISSIONER OF TAXES.)

Laid on the Table by the Hon. J. G. Ward, with leave of the House.

The Commissioner of Taxes to the Hon. the Colonial Teeasubee. Sir, — Land- and Income-tax Department, Wellington, 28th July, 1893. I have the honour to submit further information as to the results of the land- and income-tax system. These are given as at the 30th June, in order to bring the return down to the latest date possible. Contributions by persons and companies are thus summarised : —

Totals of Land- and Income-taxes. £ Persons ... ... ... 15,320 ... 242,349 Companies ... ... ... 488 ... 131,739 15,808 £374,088 Property-tax, 1889. jg Persons ... ... ... 25,841 ... 246,262 Companies ... ... ... 486 ... 107,905 26,327 £354,167 Notes.—ln the total number of payers of land- and income-tax, payers of graduated tax are not included. Some land-tax payers also pay income-tax. Church property corporations and trusts are included in companies. The additional 10 per cent, charged for late payment of tax is not included. It will be seen that tax assessed to persons under the land- and income-tax system is £3,913 less than the property-tax assessed to persons ; and the tax assessed to companies is £23,834 more than companies were assessed for under property-tax; the total result of land- and income-taxes exceeding the result of property-tax by £19,921. In consequence of the time of the staff being almost entirely occupied with the assessment of land and the collection of the land-tax, it was not found possible during 1892 to make a critical examination of the returns for income-tax, to call for additional returns, and to obtain information as to the accuracy and completeness of those already in, and the collection of the income-tax had to be proceeded with, the due date being fixed as 31st January, 1893. The tax was paid punctually. In thus collecting on the returns received, subject to certain amendments and additions that had been made, there was no final acceptance of the returns as correct; and since then very numerous inquiries have resulted in considerable additions to the revenue. The number of new and increased assessments from March 4th to the Bth July, was 247, the tax resulting there-

Land-tax—Persons Companies... 12,109 251 £ 163,226 69,355 £ Graduated land-tax—Persons ... Companies 12,360 232,581 1,414 77 44,234 23,646 1,491 67,880 Income-tax—Persons ... Companies 3,211 237 34,889 38,738 73,627 3,448 Total of land- and income-tax 374,088

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from being £3,117. The correspondence in connection with income-tax, including circular letters asking for returns, has at times been very heavy, and inquiries are now going on and will be continued. Since the Ist January last 2,000 letters have been despatched requesting information, and 1,800 asking for returns. The attempt to collect an income-tax, without having branch offices in the three principal cities, may be said to be still under trial, and it may yet be found necessary to have resident officers in Auckland, Christchurch, and Dunedin. Nothing will be done in this direction until the present system has been further tried, and the Chief Postmasters throughout the colony will, in the meantime, act as officers for the department to a certain extent in income-tax matters. Some of the Chief Postmasters have already given valuable assistance. Introducing an income-tax on a new system was inevitably a difficult task, and the taxpayers had necessarily many doubts as to< the manner in which returns should be compiled. The amount collected up to the 30th June, £73,627, must not be accepted as final, though at present a reliable estimate cannot be given as to additional tax that may be received. The amending Land and Income Assessment Bill, which will be introduced shortly, will contain provisions setting at rest some doubts as to the interpretation of the Act, and further powers will be asked to be granted to the Commissioner to obtain information respecting the completeness and accuracy of returns of income. It has been found necesssary to obtain such powers as regards both land and income taxes. No objections have yet been referred to a Eesident Magistrate sitting as a Board of Eeview. It may be remarked that it is probable that these will not be numerous, at all events compared with the number affecting land-tax assessments. The correct value of land is the question that goes to a Board of Eeview, and hardly any questions of interpretation of the law. Doubts as to interpretation will be more frequent under the income-tax provisions of the Acts ;. and, instead of having these referred to a Eesident Magistrate, they, as a rule, would be by consent taken to the Supreme Court on a case stated. There will, of course, be objections to be decided by a Eesident Magistrate, but disputes will only be thus dealt with, when they cannot be arranged without it. It has been from time to time asserted that all returns of income forwarded to this office are accepted as correct without investigation, but a very large proportion of taxpayers could, from their own experience, give this a denial. More numerous and thorough inquiries and investigations would have been made if it had been possible; but, as I have already stated, the enormous work in connection with the assessment of land, and the collection of land-tax, prevented further attention being given to the assessment of income-tax. Both systems could not be attended to at the same time with a small permanent staff. It is desirable to draw attention to the fact that what may be deemed a small result of the income-tax for this colony is due, in part, to the high exemption of £300, and largely to all income from the use or produce of land derived by the owner or occupier—this includes rent—and all interest from registered mortgages of land, being exempt from income-tax. Land and mortgages, and income therefrom, contribute to the land-tax alone. The allowance of an exemption of £300 to each partner in a firm has caused a serious decrease in the income-tax revenue, the effect being to diminish tax paid by some firms by £30, and more in certain cases. In others, where there are only two partners, and the income is charged as 6d. in the pound, the loss is only £2 10s. The attached table gives a classification of land- and income-tax taxpayers by occupation or designation, and of companies according to the business they carry on. Eesults are contrasted with those of the last assessment for property-tax in 1888, which were published in 1889. Under both systems the largest contributions were by graziers, sheepfarmers, farmers, dairymen, &c— that is, by owners of country lands — the total for land and income-tax being £89,341, and for property-tax £81,544. The number of the property-tax payers was 8,611. The number of land-tax payers is 4,760, who are assessed for ordinary land-tax £60,203; 766 are assessed for graduated land-tax £28,015 ; and 97 are assessed for income-tax £1,123. In considering these and other results it should be remembered that some who pay graduated tax do not pay landtax, but it may be taken to be the rule that the land-tax payers include those who pay graduated tax, and the number of the latter are therefore omitted in these comparisons. Further, some of those who pay land-tax also pay income-tax. Land companies (15) were assessed for property-tax £12,049; and land companies (19) were assessed for land-tax £16,579, and graduated tax £15,232, which, with income-tax £396, make up £32,207, which shows an increase of £20,158 in the present as compared with the late system. Loan companies contribute £30,923 for land- and income-tax as against £38,147 property-tax; life insurance companies, £11,790, as against £11,749; fire and marine insurance companies, £8,279, as against £6,652 ; banks pay £10,184, as against £14,244 ; mercantile companies, £16,302, as against £9,384; manufacturing companies, £7,549, as against £3,784; manufacturing and mercantile, £5,622, as against £5,807; coal-mining, £1,425, as against £1,498; gold-mining (23), £2,735, as against (113) £2,545; building societies pay £1,987, and were not assessed for property-tax ; church property corporations and trusts, £2,736, as against £2,046. In amounts paid by persons, the table shows that, as a rule, the totals contributed in the various classes under the two systems do not differ very materially, excepting in the class including " working storemen, mechanics, labourers, shepherds, miners, sailors, &c." : 2,242 paid propertytax, £4,053; and 249 paid land- and income-tax, £543. Classifications of payers of ordinary land-tax, graduated land-tax, and income-tax, by amount on which they are assessed, are also given. The report and the tables herewith should be taken in connection with and as supplementary to reports by the Commissioner of Taxes laid before Parliament in 1892 (8.-17, 8.-20, and 8.-20a)_ Chaeles M. Ceombie, The Hon. the Colonial Treasurer. Commissioner of Taxes.

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Classification of Taxpayers by Occupation.

ORDINARY LAND-TAX, 1892-93. Classification of Taxpayers by the Amount on which they are assessed for Laad-tax.

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Land- and Income-tax Payers, 1892-93. Property-tax, 1889. Designation. , Num- Gra- NumNumDei L and- ber duated ber Income- Total 01 iax " tax. of Tax- Land- of Tax- tax. Tax. payers. payers. tax. payers. Number Tax- Tax ' payers. Professional: clergymen, lawyers, doctors, authors, editors, engineers, surveyors, and architects Civil servants,, officers of local bodies, teachers, &c. Betired professional men, merchants, and others Merchants, importers, warehousemen, contractors, &c.—firms Merchants, importers, warehousemen, contractors, &c. —persons Tradesmen, wholesale and retail shopkeepers, storekeepers, carriers, &c. Working storemen, mechanics, labourers, shepherds, miners, sailors, &c. Manufacturers, brewers, millers, founders, sawmillcrs, shipbuilders, &c. Graziers, sheepfarmers, farmers, dairymen, &c. Land, commission, or general agents, auctioneers, accountants, brokers, commercial and other managers, clerks, bookkeepers, master-mariners Widows, wives' trustees, spinsters Other trust estates and estates of deceased persons Absentees Companies — Banks Life insurance .. . . Loan Land Mercantile Manufacturing Manufacturing and mercantile Mining (coal) Mining (gold) Fire and marine insurance Building societies Church property — Corporations and trusts 449 £ 6,612 42 £ 755 652 £ 6,153 £ 13,520 1,155 £ 11,677 173 773 5 10 391 1,498 2,281 547 2,216 154 6,610 45 1,660 89 692 8,962 342 12,808 92 2,603 22 243 111 8,383 11,229 336 10,326 300 5,770 56 1,306 127 2,010 9,086 667 9,658 1,251 6,182 41 204 558 5,592 11,978 3,156 14,721 220 474 2 7 29 62 543 2,242 4,053 170 1,697 19 175 139 2,280 4,152 525 5,046 4,760 60,203 766 28,015 97 1,123 89,341 8,611 81,544 397 4,220 35 323 914 6,112 10,655 1,858 13,675 1,837 1,522 13,574 33,455 57 210 689 6,738 58 20 483 362 14,746 40,555 3,760 1,492 22,274 32,287 784 21,053 114 4,109 20 139 25,301 1,150 25,977 6 6 30 19 30 23 15 6 4,596 6,771 26,567 16,579 4,850 1,832 1,495 92 6 6 14 13 9 8 5 2 2,512 446 2,700 15,232 492 463 791 8 4 8 15 3 81 44 21 7 2:; 28 3,076 4,573 1,656 396 10,960 5,254 3,336 1,325 2,735 5,427 10,184 11,790 30,923 32,207 16,302 7,549 5,622 1,425 2,735 8,279 1,987 6 10 36 15* 101 58 28 10 113 33 14,244 11,749 38,147 12,049 9,384 3,784 5,807 1,498 2,545 0,652 "9 37 2,631 1,968 "3 1 221 19 04 1,974 10 762 2,736 76 2,046 Totals 12,360 232,581 1,491 67,880 3,448 73,627 374,088 26,327 j354,167

Number. Amount on which assessed. Tax. 1,149 1,170 954 819 603 624 502 446 358 314 1,586 939 680 401 920 462 296 83 30 24 Under £100 and under 200 300 400 500 600 700 800 900 1,000 2,000 3,000 4,000 5,000 10,000 20,000 50,000 100,000 200,000 and over £100 200 300 400 500 600 700 800 900 1,000 2,000 3,000 4,000 5,000 10,000 20,000 50,000 100,000 200,000 Under Over £ s. d. 0 8 4 0 16 8 15 0 1 13 4 2 18 2 10 0 2 18 4 3 6 8 3 15 0 4 3 4 8 6 8 12 10 0 16 13 4 20 16 8 41 13 4 83 6 8 208 6 8 416 13 4 833 6 8 833 6 8 Total ... 12,360

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GRADUATED LAND-TAX, 1892-93. Classification of Taxpayers by the Amount on which they are assessed for Graduated Land-tax.

INCOME-TAX, 1892-93. Classification of Taxpayers by Amounts on which they are assessed for Income-tax.

Notes. —To give the actual incomes, £300 should be added to each taxpayer other than companies. A firm is entered as one taxpayer. Incomes derived from the use or produce of land, or rents, or from shares in registered companies, banks, &c, are not included in incomes assessed for taxation. Approximate Cost of Paper.—Preparation, not given ; printing (1,875 copies), £310s.

By Authority : Samuel Costall, Government Printer, Wellington.—lB93.

Price, 3d.

Number. Amount on which assessed. Bate. Tax. 802 385 118 55 30 52 21 8 5 3 6 2 1 3 £5,000 and under £10,000 10,000 „ 20,000 20,000 „ 30,000 30,000 „ 40,000 40,000 „ 50,000 50,000 „ 70,000 70,000 „ 90,000 90,000 „ 110,000 110,000 „ 130,000 130,000 „ 150,000 150,000 „ 170,000 170,000 „ 190,000 190,000 „ 210,000 210,000 and over d. 0* Of 0£ u 8 04 0-5. u 8 0^ 0^ 1 It 14 J -8 14 1-5 -"•8 1^ Under Over £ s. d. 5 4 2 20 16 8 46 17 6 83 6 8 130 4 2 218 15 0 328 2 6 458 6 8 609 7 6 781 5 0 973 19 2 1,187 10 0 1,421 17 6 1,531 5 0 Total ... 1,491

Persons: Number of Taxpayers. Companies: Number of Taxpayers. Total Taxpayers. Amount of Taxable Income. 1,245 675 381 226 162 81 90 56 ■ 51 31 87 51 75 15 19 19 10 15 9 7 8 9 7 21 16 82 1,260 694 400 236 177 90 97 64 60 38 108 67 157 Under £100 200 300 400 500 600 700 800 900 1,000 1,500 2,000 and under and over. £100 200 300 400 500 600 700 800 900 1,000 1,500 2,000 3,211 237 3,448