LAND AND INCOME TAX

Manawatu Standard, Volume XLIX, Issue 248, 18 September 1929, Page 7

LAND AND INCOME TAX

GOVERNMENT’S PROPOSALS.

SOME ALTERATIONS MADE.

BILLS READ FIRST TIME, (By Telegraph.—Special to Standard.) WELLINGTON, Sept. 17. The Land and Income Tax Amendment Bill and the Land and Income Tax (Annual) Bill were introduced and read a first time in the House of Representatives to-day. Clause 2 of the former provides for the special land tax on farm lands of an unimproved value exceeding £14,000 with the proviso that no lands shall be deemed, for the purposes of this section, to be capable of being used for agricultural or pastoral purposes if, in fact, they are regularly used for any purpose that renders impracticable their use for agricultural or pastoral purposes. CASES OF HARDSHIP.

The Governor-General-imCouncil may appoint a commission, to inquire and report as to any cases of hardship that may arise from the imposition of special land tax. If in any such case the commission reports that,_ in its opinion, the payment of special land tax by reason of the financial position of the taxpayer has entailed, or would entail, serious hardship to him, the Commissioner of Taxes may, in accordance with the report of the said commission, refund the whole or any part of the special land tax so paid, or release the taxpayer, wholly or in part, from his liability to pay such special land tax. Section 169 of the principal Act shall have no application with respect to the liability of a taxpayer to pay special land tax. SPECIAL EXEMPTION. Section 6 makes special exemption for the purposes of land tax to be deductible from the unimproved value of mortgaged lands:—(a) where the total unimproved vaiue afforded does not exceed £7500, the sum of £7500; (b) where the total unimproved value aforesaid exceeds £7500, the sum of £7500, diminished at the rate of £1 for every £1 of that excess, so as to leave no deduction under this paragraph when that value amounts to or exceeds £15,000. Special provisions have been made as to assessment for land tax of a mortgagee in possession. The proviso reads: —“Provided that, in each of the five years of assessment immediately following the year in which the mortgagee entered into possession, the commissioner shall, if satisfied that the mortgagee is in possession solely for the purpose of furthering the realisation of his security, assess him separately in respect of the estate or interest of which he is deemed to be the beneficial owner as aforesaid.” This is in substitution for section 25 of the Finance Act, 1928. which is to be repealed. The Public Trustee and the general manager of the State fire insurance office in their corporate capacity are to be. liable for land tax. The Public Trustee is to be assessed for land tax in certain cases as if he were the mortgagee in possession and not the owner of the lands. INCOME TAX. Under this heading there is a clause defining the extent to which income derived from the direct use or cultivation of land is assessable under the principal Act. The income tax payable in respect of income derived from the use of land is to be reduced by the amount of the land tax payable in respect of the same land. DEALING IN LIVE STOCK. There are especial provisions as to the computation of assessable income derived from the business of dealing in live stock. Clause 14 of the Act amends the provisions of the principal Act _in regard to the special exemptions in respect of children and there is a special exemption provided for in respect of dependent children incapacitated by permanent mental or physical infirmity. THE ANNUAL BILL.

In the annual Land and Income Tax Bill the schedule for the special land tax is as follows: (1) Where the unimproved value-of the farm lands in respect of which special land tax is payable exceeds 4114,000, but does not exceed £16,500, the rate of special land tax shall be 1 per centum of so much of the ordinary land tax payable, under part 1 of this schedule, as is apportioned to such farm lands for every £SO or part of £SO of such unimproved value in excess of £14,000. (2) Where the unimproved value of the farm lands in respect of which special land tax is payable exceeds £16,500, the rate of special land tax shall be 50 per centum of so much of the ordinary land tax payable under part 1 of this schedule as is apportioned to such farm lands, increased by 1 per centum for every £270 or ■ part of £270 of such unimproved value I in excess of £16,500, but so that in no lease shall the special land tax exceed j 100 per centum of the amount of the I ordinary land tax payable in respect of such farm lands under part 1 of this schedule. , (3) J.n any case where, by virtue of any special 1 provisions relating thereto in the Land and Income Tax Act, 1923. the amount of ordinary land tax payable by a taxpayer is either greater or less than the amount calculated in accordance with part 1 of this schedule, the special land tax shall be computed by reference to the amount of land tax that is actually payable in such case. DISCUSSION IN HOUSE. When the taxing bills reached the House of Representatives to-day Sir Joseph Ward, in reply to Rt. Hon. J. G. Coates, said that the bills provided what was indicated in the Budget with a slight variation. The Land Taxing Bill would make provision for hard cases. (Laughter.) For the hardships clause a commission would be set up to deal with disputed cases. Sir Joseph Ward said that he would not refer the bills to a select committee of the House; that had never been done. Mr Coates said he thought that such bills had, on one or two occasions, been before a committeo of the House. It was quite clear now that the ori--1 ginal proposals did not give satisfaction. . Sir Joseph W r ard said that there had been a bogus agitation throughout the country. . The whole of the criticism had been in tho direction of freeing the large landowners. Seventyfive per cent, of the farmers would not be affected by this legislation at all. Now that the proposals were to make it easier, they got the same howl from the Opposition, but he would not refer the bills to a special committee. The bill would be put on the Sthtute Book notwithstanding all that had been said. Mr H. E. Holland said he was glad that the Prime, Minister had put in a hardship clause. If the bill erred at all, it erred on the side of letting off tho large landowners. INJURIOUS EFFECT ON LAND. Mr Coates denied that he had been the representative of a small coterie.

He had not been in touch with the large land owners, but this legislation must have an injurious effect on land generally. The Opposition did not represent any particular class of farmer; all they were anxious about was that the State should do the right thing so that there should be no injustice. The bills were read a first time.