FARMERS AND INCOME-TAX

Dominion, Volume 10, Issue 3042, 31 March 1917, Page 15

FARMERS AND INCOME-TAX

_Sj*»~l have been discussing a question here connected with farmors and the war profit tax, whioh if the tax is reokone9, as I hold it will be, will give the farmers in spme places a nasty'; shock. In this district there is at present being carried out a Government revaluation, the, first in ten years. Now, take the case of s fanner whose' property has previously been valued at £2000, and whose property is now valued at £3000, an increase of £1000, wElch is not uncommon. This man; in furnishing his returns,. takes the Government valuation. If the Income Tax Department wort the returns but on the same basis as they do business returns, this will show the farmer £1000 moro than his profit'aotuaEy is from his farming operations. Assuming that these operations bring him in the limit of £300, he will then-be taxed 4.5 per cent, of the £1000,, whioh .is £450, plus the ordinary, tax on an income of \ £1300. ■■ He will, have to mortgage his farm to p_ay, his taxes. -. Am I cprreot' in' this calculation P Because, if so, farmers , should- beware of taking the government valuation for their lands.—l am, etc.,'

:"■." ' au.s. . JTJndor no oircumstances can an. addition to .valuation .bo considered for tho_ pnrposo of tho assessment of tax, as income. The income taxes payable by farmers—on ordinary income and on excess profits—are assessed 00. the returns supplied by the farmers themselves. A. farmer is asked to leturn his gross income and the items of bis expenditure. Of these items those en maintenance are allowed as nroper deductions, for tho purpose of ascertaining tho net income, but those on st'ch permanent improvements as new buildings, new fences, new drains, or bushfelling, are disallowed.]