CO129-595-3 Proposed introduction of income tax 12-12-1946 - 26-1-1947 — Page 13

Gates &

25/1/47

DRAFT TELEGRAM

GOVERNOR,

Code of Tram

26 JAN 1947 28/

hopps.

Al Super E

TY.

- 7. Gilbert B.! Ro

B! Rem you.

emenne

4 libphon Podar.

54301/47

boded a sent

No. 165 boded

Your telegram No. 1651.

1515

26-147

Revision of War Revenue Ordinance.

You will wish to know that draft Income

13

Tax Ordinance which Padney is taking beok with

him after consultation with Board of Indland

Revenue has my general approval in principle.

Pudney will fully explain ways in which draft

Ordinance differs from 1941 Ordinance,

Principal advantage over 1941 Ordinance is

that it permits institution of a standard rate

and gives encouragement to taxpayers to seek

personal assessment on basis of whole income.

2. Question of rates of tax was not

discussed in detail with Fudney except in

general terus. I wish, however, to emphasise

the importance I attach to putting the

standard rate at as high a level as you

consider practicable. In this connection

Ordinance as drafted by Pudney will not permit

the imposition of a surtax on higher incomes

and this is an additional reason for making

the standard rate as high as possible with

individuals in lower income groups being

given larger allowances where personal

assessment basis is chosen. I shall be glad

to learn in due course what rates you actually

propose.

3. I would also emphasise that I consider

Ordinance as prepared by Pudney to be suitable

only as an interim measure pending the

introduction of a normal Income Tax.

4. Consider that introduction of increased

taxation should not be deferred beyond

1st April