STATEMENT BY THE COUNCIL REGARDING AFFORESTATION. 85 



putting silviculture on the same footing as agriculture, and 

 making the Agricultural Grant apply to all land used for growing 

 timber for profit. 



Income Tax. — Similar discouragement is caused in the case of 

 income tax. Where land is left in agricultural occupation, and 

 let to a tenant, the owner escapes all income tax under Schedule 

 B. But as soon as he takes the land into his own hands and 

 plants it, he becomes liable in respect of it to both income tax 

 and super-tax. It is obvious that, with income tax and super- 

 tax at present rates, this is bound to be a deterrent to 

 planting. 



To some extent the burden has been diminished by the 

 provisions of Section 22 (4) of the Finance Act, 19 15, which 

 gives the owner the right, as regards existing woodlands 

 managed on a commercial basis, to be assessed under Schedule 

 D instead of Schedule B. The profits, however, under Schedule 

 D are to be based on a three years' average only, which is too 

 short a period in the case of timber crops : it should be at least 

 five years. 



Under Section 38, Sub-section (2) of the Finance Act, 1916, 

 the owner may claim to have all replanted or newly planted 

 areas treated as " woodlands on a separate estate," and assessed 

 under Schedule D. This clearly gives immunity for income 

 tax (but only as regards occupancy) until such time as the crop 

 of timber begins to be saleable. The concession is certainly 

 a valuable one, provided that all the expenses of planting 

 and maintenance are allowed to be deducted before profits 

 are reckoned. Otherwise the benefit is illusory. As there 

 is some doubt upon the point, it should be cleared up without 

 delay. 



Death Duties. — Timber, like every other kind of property, is 

 subject to the Death duties, and, under ordinary circumstances, 

 there would be no ground for seeking exemption for it. But the 

 State never dies ; and if the State is to own forests, and to 

 compete with private individuals in the sale of its timber, it will 

 have an unfair advantage unless some change is made. It will 

 therefore be necessary, either that standing timber should be 

 exempted from payment of Death duties, or that the State 

 should consent to be taxed for an equivalent sum every twenty 

 or thirty years. 



