Some six months ego we called attention bo an extraordinary circular issued by the Commissioner of Taxes, claiming that Interest pajd on mortgages could not be dedaofced from returns of Income for taxation pnrpose?. At the time wo con« tended that each a claim was Inconsistent with the spirit of the land and Income Assessment Act, which provided that all necessary outgoings Incurred in the pro. duotloa of the income of a person or com pany should be deducted. The Act specifically mentioned rent of business premises as an item to be deducted. Our contention was that the interest paid on a mortgage waa a neces s \ry outgoing, and that it was, in fact, in the nature of rent, If the demand canld have been upheld the man with a mortgage would hare been taxed more heavily than his neigh bor and competitor wi'.h a freehold not mortgaged, A Canterbury company re fused to pay the tax demanded by the Commissioner, and was sued ia the Supreme Court, which decided that the Commissioner's claim was untenable. I The Government, however, determined | that if it l&y in their power the moitgaged man or compiny should bj doubly taxed, and intro laced & bid providing, as an addi tion to schedule v. of the Act of lS9l,Jthat among the outgoings nob to be deducted should be included interest on mortgage and moneys paid on account ot any land tax or income tax under any Act. Tlie ' first part ot this clause was struck out in committee, and it now reads " aor for the ] amount of any land tax or income tax paid nnder any Act." Bnt in the analysis at the head ot the Act it declares that the clause provides Hiitraoney paid for interest on mortgage shall nob bededucted, and the marginal reading totha clause is " Money paid for interest on mortgage or for land tax not to be deducrei" The clause, i however, aa we have pfciied, does not beat out this interpretation. It is simply an i example of very careletss leglslatio a. The clause, and not the interpretation put I upon it to. the analysts or margin, te the law, and therefore any company or person may deduct interest paid on mortgage, except mortgages on dwo'ling-hou^es, or parts of business premises used as dwell ing-bouses.
