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Consular reports, Issues 196-199 online

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the principal feature of the system:

The ratable value of any property means the rent at which such property would let from
year to year, deducting therefrom 20 per cent in case of houses, buildings, and other perishable
property and 10 per cent in case of land and other hereditaments, but shall in no case be
less than 5 per cent of the fee simple thereof.

Without a special act of Parliament no city council can make a levy in excess of 2s. o^d.
(49 cents) per $4.86.

A very charitable provision is made in the rating act, which reads as
follows :

Upon the i>etition of any person praying for a remission of any rates upon the ground of
extreme individual poverty, arising from accident or continued illness or other cause beyond
No. 196 3.

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the control of such person, the council may, if it thinks Bt, upon being satisfied after full in-
quiry that the allegations in such petition are true, remit the payment of any rates by the
petitioner, either wholly or in part or for such term as the council thinks fit.

There is no doubt this merciful provision is frequently taken advantage
of by those who, through no fault of their own, are overtaken by misfortune.
To unduly press them at such a time would only intensify their hardship.

New local bodies rating act on unimproved values (^passed July lo, i8g6). —
This act should gladden the heart of the average "single taxer," for the
reason that it goes a long way in that direction ; at least in so far as it applies
to taxation for local purposes — that is to say, town boards, boroughs, road
boards and county councils, etc. By the provisions of this act, 25 per cent
of the ratepayers of any defined district, where the total number of ratepay-
ers on the roll does not exceed one hundred, may petition the chairman of
any road board, county council, or mayor of a borough to call an election
for the purpose of determining whether taxes shall be levied under the old
system, viz, land and improvement, or under this act, which provides that
taxpayers may elect to levy taxes on the unimproved value only.

Twenty per cent of the ratepayers of any district, when the number on
the roll exceeds one hundred, but does not exceed three hundred, and 15
per cent where the total number of ratepayers exceeds three hundred, may
petition in like manner. The election must be held twenty-one days after
due notice.

The ballot papers for this purpose shall, according to the act, read as

Proposal that the rating on unimproved value act, 1896, be adopted in the (name of dis-
trict), and that henceforth property be rated on the unimproved value thereof.
(i) I vote for the above projx)sal.
(2) I vote against the above proposal.

A majority of the number of votes cast is necessary to the adoption of
the proposal, provided that at least one-third of the ratepayers on the roll
shall have recorded their votes. Should the vote be favorable, no steps can
be taken to rescind the same for a period of three years. Should the result
of the ballot be unfavorable, no vote can be taken for three years from that
date. At the end of three years, the contest may be renewed for or against,
under the above conditions.

As soon as conveniently may be after an adopting proposal is carried in
any district, a valuation roll of the ratable property in the district must be
prepared by the local authority ; provided that, instead of setting forth the
capital value (which means the gross value of the land, including improve-
ments), the roll and all notices of assessment shall set forth the gross value,
the value of improvements, and the unimproved value of all ratable prop-
erty in the district ; and the rates, when levied, must be on the unimproved
value only.

The value of the different classes of property, namely, gross value, im-
proved and unimproved value, must be given in parallel columns, evidently

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for the purposes of comparison and to assist the officers in arriving at satis-
fectory results.

Any person objecting to the assessment of the gross value, or to the
value of improvements, or the unimproved value, may apply in the ordinary
way to the assessment court for redress. But, should such objection be sus-
tained, the gross value of the reduced assessment shall be adjusted to equal
the value of improvements, plus the unimproved value.

It is provided that in all cases where, by any act, a limit of rating power
is imposed upon any local authority, and in all cases of special and annually
recurring rates, or of any rates the amount of which is fixed for any definite
period of time, the following provisions are made to apply for the purposes
of taxing on the unimproved value under this act :

When such rating power or rate has reference to the annual value, a rating power or rate
equal to IS. (24 cents) in the pound sterling ($4.86) on the annual value shall be deemed to
be equivalent to a rating power or rate of 3 farthings (i^ cents) in the pound on the gross
value, and so on — a greater or smaller sum in the like proportion for a greater or smaller
rating power or rate than is. in the pound on the annual value.

The rates levied on the unimproved value under this act must be so ad-
justed as to equal, as near as may be, but not to exceed, in their producing
capacity the rates made and levied under the old system. Evidently this
provision has been introduced for the purpose of encouraging the taxpayer to
adopt the new system of taxing on unimproved values only. The provisions
of this act do not apply to cities, but only to towns, boroughs, road boards,
and county councils. The principal reason why the large cities are not in-
cluded is that the members representing city constituencies in the legislature
would not favor it, believing it to be inapplicable for purposes of taxation
in large centers of population.

It will also be observed that its acceptance by the local bodies is not
compulsory — had it been otherwise, it would not have passed the legislature —
but being optional, no serious objections were offered to its passage.

I can not, of course, say anything as yet as to the extent to which the
local bodies may avail themselves of its provisions, as it has only just passed.
Neither can I offer any opinion as to its popularity and adaptability as a
system of taxation.

There are a large number of single-tax advocates in the colony who have
been, for a considerable time, endeavoring to get some such measure passed
as a sort of entering wedge or prelude to a more comprehensive scheme of
single tax, and I believe I am right in saying it is to their persistent advocacy
the passage of this measure is mainly attributable.

It will be an interesting study to watch — and I shall endeavor to do so —
the progress this single-tax "infant'* may make with the local bodies of
New Zealand.


In my last report on this subject, I endeavored to condense the principal
act, but with due regard to intelligibility. I found, however, after the

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report had been circulated, that it was unsatisfactory to a large number of
people, as evidenced by the numerous inquiries received asking for further
details of the law. Therefore, in order to afford all an adequate idea of the
land and income tax act, I have deemed it better to forward the act itself
with this report for the purpose of having it embodied therein and thereby
avoid the unsatisfactory results of my former effort.

In the preceding pages of this report, I have given the substance of the
amendments made to the original act since it came into operation.

With a view to placing the readers of this report in a position to fully
understand each particular item and subject mentioned in detail in the prin-
cipal act, I forward a comprehensive memorandum issued by the tax depart-
ment for the convenience of taxpayers. Reference to this index will enable
the reader to read the principal act with greater intelligence and satisfaction.
I also send the forms sent out by the commissioner of taxes to each taxpayer,
in the following order:

(i) Income-tax form.

(2) Land and mortgage form, including ordinary land and graduated tax.

(3) Returns to be prepared by gold-mining companies.

(4) Statement of income by business, manufacturing, or trading con-

By i)erusing these forms, it will be seen how complete and comprehensive
are the details and machinery for extracting the fullest information and money
from the taxpayer.

My aim has been throughout this work to give as many details as possi-
ble. This will, to some extent, account for, and, perhaps, in a small degree,
excuse, the length of the report.


I have been a studious observer of every phase of social life and legisla-
tive change that has taken place in this colony during the past seven years.
I arrived at the very beginning of the experimental era — and it is no misno-
mer to call much of the legislation of the past few years experimental in the
truest sense. But while it is so, there is a most gratifying feature which com-
pensates for the violence done to the feelings of those whose motto has been
**let us permit matters to remain as they are, they suit us well enough.'*
That the legislative innovations of the immediate past have shocked the sen-
sibilities of a large number of prominent and well-to-do colonists is unques-
tionably true, but, at the same time, as against any inconvenience they may
have experienced on this account, there is the fact of increased prosperity
in nearly every branch of trade and industrial life throughout the country,
farm products are fetching satisfactory prices, manufacturing industries are
running full time and paying good wages and fair interest on the capital in-
vested, labor is remuneratively employed, interest on money has fallen from
6 and 7 per cent to 4 and 5 per cent (this of itself, is sufficient to prove that
money is abundant). Millioiis of English capital are flowing in for the de-
velopment of the gold fields of the colony, and the credit of the country

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at no period of its history stood so high on the English market as it does

I may also mention that, through the genuine encouragement given by
the Government to the small- farmer class, the waste lands of the country are
being rapidly taken up wherever land is found suitable for farming or grazing

Notwithstanding the admitted prosperity of the colony and the fact that
the Government have had a substantial surplus over expenditure now for a
number of years, the national debt continues to increase. But the increased
indebtedness is not of the usual character, for the reason that the country has
security for nearly all the money borrowed in recent years. Money had to
be borrowed under Government guaranty to save the Bank of New Zealand
from closing its doors. This was done to avert financial disaster, and if the
Government had not come to the rescue at the critical moment it would
have brought the colony to its knees. The Government holds the principal
assets of the bank as security, and these are presumed to be ample.

Money has been borrowed to purchase large estates for the purposes of
settlement. Those who take up land under this system, as already stated,
j)ay an annual rental sufficient to cover the interest on the purchase money
and the cost of administration. The land is always vested in the Govern-
ment and this must be regarded as a good asset. One million and a half
sterling was borrowed last year in England at 3 per cent per annum. This
^1,500,000 loan is called the ** advances to settlers loan." This money is
lent out to farmers at 4 per cent per annum. One per cent is considered
sufficient to cover the cost of administration. The Government have special
valuers, who are men of experience in their respective districts, and who re-
port upon all properties upon which it is sought to obtain an advance. These
valuers submit their reports to a board known as the ** advances to settlers
loan board,** who either approve or reject the application. This loan has
been a great boon to struggling small farmers, who were paying as high as 8
per cent on their mortgages.

Immediately this money became available, interest came tumbling down
to 4 per cent for good freehold security, so that, taking the increased indebt-
edness for the purposes mentioned, it can scarcely be called a real increase
in the national debt, because of the class of security available to meet the ob-
ligations thus incurred.

Of course, it must be admitted that there is an element of risk in all kinds
of borrowing, but, in this instance, every precaution seems to have been
taken to prevent any loss being made. I need scarcely add that the large
landholders, the mortgage companies, and the money lenders generally did
not favor this kind of legislation, particularly the cheap advances to settlers,
but their opposition was utterly futile. With the advent of the one-man-one-
vote and the extension of the franchise to women, the power of corporate
wealth in this country appears to have been irrevocably destroyed. Whether
this be for good or evil, I am not, of course, in a position to say. I can say,
however, that no ill effects of the change are apparent up to the present; on

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the contrary, the country is more prosperous and at least as honestly and as
economically administered as it was under the old regime.

To say that this country is, in my opinion, more truly democratic than
any country in the world would be merely stating a simple truth ; and to
say that the present Government is a workingman's Government is equally
true. A great deal of the legislation of recent years, however, is in advance
of the requirements and ideas of the people, with the result that some of it
has proved to be annoying and irksome to many. This is especially true
of some of the labor laws. The Government are honestly endeavoring to
place the masses in possession of their legitimate rights with as little friction
as possible, and at the same time with due regard to vested interests and the
propriety of things generally. But while struggling thus with the duties and
responsibilities of their official positions, the members of the Ministry are
torn asunder by the clamorous and impracticable demands of the unreason-
able and irresponsible. The sympathies of the Government are unmistakably
with the people, but the honor, the dignity, and the welfare of the country
will not permit them to depart from a course too inconsistent with the sense
of obligation, fair dealing, integrity, and responsibility which are the admit-
ted characteristics and duty of all civilized governments.

The great danger at the present moment is too much legislation in one
direction. This is the one thing wherein the Government find it really hard
to resist the demands of organized labor. There is, however, a very grati-
fying disposition manifesting itself among the more reasonable members of
the labor societies to let well enough alone for the present — a disposition it
is much to be hoped may extend throughout the whole body of the workers.
If not, I have no hesitation in predicting a serious revulsion of public senti-
ment and sympathy within the next few years. Labor has had a good in-
nings; common sense should suggest moderation, now that so much has
already been accomplished in the short space of four or five years. I do not
mean that, by any chance, the people would revert to the old order of things,
but they would call a halt in the trend of legislation if no steps are taken in
this direction in the near future.

The leveling process, which began here about seven years ago, has now
reached a point where prudence, good taste, and a due regard for the rights
of others might fairly suggest a respite, and that, too, without loss of dig-
nity or interest to any class. Indeed, for the well-being of the nation as a
whole, it would seem to be desirable that for security and the uninterrupted
maintenance of public confidence in the integrity and stability of govern-
ment — ^such as it now enjoys to the fullest extent — wisdom should suggest a
modification of the pace. People, as a rule, have no objection to the process
of evolution by easy stages, but they have a pronounced dislike to being
bustled or unduly hurried, and that is why I believe discretion to be neces-
sary in the legislation of the immediate future in New Zealand.


Auckland, September ^^ i8g6. CotisuL

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OF 1891 AND 1892,







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"The I^nd and Income Assessment Act, 1891," and- "The Land and Income Assessv
ment Act Amendment Act, 1892," and the regulations made by the Governor in Council
dated the 31st October, 1891, and the 26th March, 1892, are published in classified form for
the convenience of those requiring to refer to them. The Act of 1892 is distinguished from
the Act of 1891 by a black rule in the margin, opposite extracts from the amending Act.
Those parts of the Act of 1 891 that have been repealed are printed in erasure type.* The
regulations of the 26th March, 1892, which deal more particularly with the assessment of
income, are distinguished from the regulations of the 31st October, 189I, by a light rule in
the margin. Forms of returns, notices, &c., prescribed by regulations, are not reprinted.


Commissioner of Taxes,
Land and Income-tax Office,

Wellington^ 2jrd November^ i8g2.

* These parts of the act are inclosed in brackets [ ].

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I. Short Title.


a. Repeal of Acts relating to property-tax. Saving.

3. Interpretation.



Appointments f Cs>c.

4 . Power to appoint Commissioner and Deputy Com-

missioner. Persons in office now to remain in

5. Powers of Deputy Commissioner.

6. Powers and duties of Property-tax Commissioner

to vest in Commissioner under this Act.

7. Power to appoint other officers.

8. Secrecy to be maintained. Oath of office.

9. Penalty for contravening intent of oath.

10. Regulations for administration of Act to be made

by Governor in Council.
XI. Regulations to be gazetted and have force of law.
X3. Governor in Council may extend time for doing


Public Officers of Companies — Agents and Trus- .

13. Companies to be represented by a public officer.

14. Liabilities of agents and trustees.



15. On what taxation to be levied.

General Exemptions from Tax.

16. Elxemption from tax: (i.) Land. Lands of the

Crown, of Government Railways, and of local
bodies not liable, (a.) Income.



17. How land and income to be assessed.

18. Money received, and money, land, or mortgages

acquired, for investment in colony between cer-
tain periods to be liable to tax.

Notice o/and Objections to Assessments.

19. Notice of every assessment to be sent to persons

affected. Omission of notice not to invalidate
assessment. How objections to be made to as-
sessment. Wliat constitutes assessment-roll or

Review 0/ Assessments,
ao. Boards of Review to be appointed.
21. Powers and duties of Boards.

Assessment-rolls and Registers.

aa. Rolls and registers to be evidence. Returns made
by persons or companies to be deemed duly
made. Irregularity not to vitiate assessment.

33. Alterations may be made by Commissioner. Hear-
ing of objections thereto.



24. Notice of due date of tax to be given.

25. Tax to be recovered by Commissioner. Proce-

dure in local Courts.

a6. Power to the Commissioner to enforce assessments
in certain cases: (x.) Land and mortgage*;;
(2.) Income; (3.) Against personal representa-
tives ; (4.) No lapse of time to be a bar to pro-

aj. Provision if too little tax has been paid.

a8. Provision if too much tax has been paid.

39. Statutes of limitation not to bar remedy. Act not
to limit operation of "The Crown Suits Act,

30. Power to purchase land at value stated in return

in certain events. Right of appeal.

31. Commissioner may be required to reduce assess-

ment or purchase land.
3a. Colonial Treasurer to pay purchase-money.

33. Land acquired may be sold, &c., as directed by

Governor in Council.



34. Summons to unknown owner may be posted on


35. Judgment may be given against owner.

36. Remedy against tenant or mortgagee if owner

fails to pay.

37. Person paying lax may recover from person lia-


38. Remedy in case of persons under disability.

39. Married women liable to tax.

40. Covenants to evade tax void.

41. Tax to be a first charge on land.

42. Commissioner or officers may appear in proceed-


43. Penalty for making false returns or evading tax.

44. Procedure to recover penalty.

45. Penalty for obstructing officers.

46. False declaration punishable as perjury.

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47. Procedure to recover penalties. Not prejudiced

by irregularity. Power to remit or compound
for penalties.

48. OflTences may be prosecuted within three years.


Schedule A.— Tax to be assessed on the actual
vahie of land ; meaning of "actual value ;" meaning
of "improvements." Deduction of ^^500 in certain
cases ; proviso ; further proviso. Purchasers of Crown
lands on credit liable to tax. Leaseholds liable to
tax. Apportionment of deduction for improvements.
Exempt lands in hands of tenants liable to tax. Oc-
cupiers of land for mining purposes liable as upon
income from business. Mortgagees to be taxed on
mortgages. Income-tax on loan, building, and in-
vestment companies. Mortgagee not exempt in cer-
tain cases. Mortgagee not to be liable to graduated
tax on land. Registration of mortgage. Meaning
of " mortgage :" meaning of " mortgagee."

Schedule B.— Persons and companies to be liable
to graduated tax on land ; scale of taxation ; tax on
absentees' land ; graduated ux to be assessed on value

of land less improvements; meaning of "improve
ments." No deduction in respect of mcHtgages.

Schedule C. — What companies liable to income-
tax; meaning of "income." Assessment of shipping
companies; assessment of insurance companies. Cer-
tain companies to be deemed agents of holders of
debentures. Company not entitled to exemption in
respect of income-lax. How life insarance compa-
nies to be liable.

Schedule D. — Persons liable to tax from business ;
meaning of expression. Deduction from taxable
amount by way of exemption.

Schedule E. — Persons liable to tax from employ-
ment or emolument ; meaning of expression. Dedtic-
tion from taxable amount by way of exemption.

Schedule F. — Losses, &c., to be deducted from
gross amount of income. For what matters no de-
duction to be allowed. Computations of tax to be
made separately. Companies, &c., to furnish lists of
persons employed. Certain allowances to be taken
into account as income. Deduction allowed in case
where land occupied for business or employment has
paid tax on land. Deduction of amount paid as life
insurance premium allowed.


I. Short Title (page 43).
a. Interpretation (page 43).

3. Additional exemptions from liability to tax (page


4. Amendment of law as to time and mode of mak-

ing assessments and returns. ( I.) Triennial re-
turns of land and mortgages by persons. (2.)
Annual returns of land and mortgages by com-
panies. (3.) Returns of income. (4.) Returns
of land mortgages and income for year 189a.
(d,) Further provisk>ns as to assessments (pages

51. 5a. 53)-

5. (i.) Provision as to assessment of land and mort-

gages held by or belonging to tenants in com-

Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 196-199 → online text (page 7 of 82)