8.—5

6

profits. This supplementary tax should be in addition to the tax on their undivided profits. (g.) Companies registered outside New Zealand should be taxed on their total incomes derived from New Zealand at the rate at which companies registered iv New Zealand are assessed on their undivided profits, and should also be liable in respect of such incomes for any flat-rate company tax. (h.) Oversea shareholders and debenture-holders in companies registered in New Zealand should have their tax stopped at the source at the maximum rate. The companies interested should be deemed agents for their oversea shareholders and debenture-holders, and should be responsible for the payment of the tax. Oversea shareholders and debenture-holders should have the right to apply for and obtain a rebate of the difference between the maximum rate charged and the rate that would apply to the whole of their income derived from New Zealand. No exemption should be allowed to oversea investors in New Zealand. («'.) The incomes of pastoral tenants should be made subject to tax, and this should be done immediately, so that the incomes for the year ending 31st March, 1924, will not be allowed to escape taxation. (j.) That the present graduated land-tax should be abolished, and income-tax should be paid in respect of income from land as part of the taxpayer's income. (k.) That any loss of revenue brought about by the adoption of the last recommendation should be made up by a flat rate of land-tax on all unimproved landvalues over £2,000, with a rate below £2,000 of two-thirds of the rate above £2,000. Present £500 and mortgage exemptions should be continued. It is thought that in the pound up to £2,000, and fd. in the pound beyond that amount, will produce the sum at present required. In assessing income-tax no exemption should be allowed in respect of this land-tax. (1.) The flat-rate tax on. companies referred to in paragraph (/), and the flatrate land-tax referred to in paragraph (/;), should both be regarded as temporary taxes, to be reduced and ultimately abolished as soon as the national finances permit. (m.) In the meantime, and until the individual system of income-tax has been brought into operation, the incomes of individuals from all sources (except tax-free war loans) should be aggregated in order to fix the rate that should apply to that portion of the taxpayer's income that is taxable in his own hands. In fixing the amount of his tax the amount of tax paid at the source in connection with his other investments should be taken into account, but no rebates should be made if the total amount paid, after charging the amount taxable in the taxpayers' own hands at the rate that would apply to that amount only, comes to more than the amount that the tax would have been if the whole income had been taxed in the hands of the taxpayer. (v.) That when these land-tax recommendations are put into effect the Commissioner of Taxes should be empowered to assess a net income at 5 per cent, on the capital value of any land that he considers to be either lying idle or not being utilized so as to produce a reasonable income. (o.) That the question of double taxation be further considered, and arrangements made that will result in British capital invested in New Zealand being placed in a position at least as favourable as in Australia, provided such an arrangement does not put British investors in New Zealand on a better footing than New Zealand investors. (p.) That in any event the favoured position of public-body and company debentures, as far as income-tax is concerned, should be abolished immediately. (q.) That if the graduated land-tax is not abolished, relief should be given in connection with the present graduated land-tax payable on business premises. (r.) That State and public-body trading and public-utility concerns should be charged income and land tax to the same extent as private enterprises, and that, for the purposes of taxation, their borrowed capital should be treated in the same way as borrowed capital in private enterprise is treated. (s.) That tax-paid company debentures should be put on the same footing as (ax-deducted company debentures.