THE WAR LOAN

Evening Star, Issue 23699, 5 October 1940, Page 15

THE WAR LOAN

BASIS DF SUBSCRIPTION FULL EXPLANATION BY MINISTER [Pea United Press Association.J WELLINGTON, October 4. A further explanation of tlio basis of the minimum subscription to the current war loan was rnado by the Minister of finance, Hon. W. Nasli, in a statement to-day. “ 'The minimum subscription for individuals,” the Minister said, ” is in general to be taken as the excess over £SO (calculated to the nearest multiple of £10) of income tax which was payable in February last in respect of income derived during the year ended March 31, 1939. In the case of companies, the minimum subscription is the excess of income tax (also computed to the nearest multiple of £10) over £7O. “ Where persons are in receipt of exempt income, that is, income not subject to income tax, the income tax is to be computed as if that income were assessable income, and not as being income which is either wholly excluded from assessment or which is merely taken into account for the purpose of . increasing the rate of tax payable. Exempt income to be taken into account in this way will include dividends from overseas companies (but not local companies), and other exempt income from abroad, interest from taxfree Government stock and from taxfree company debentures, also farming income where the land used had an unimproved value of less than £3,000. “ In short, exempt income includes all income that was subject to the social security charge but which was not assessable for income tax, and also all income derived from abroad and exempt from social security charge because it has already borne a similar charge overseas, but does not include dividends from New Zealand companies. DEDUCTIONS EXPLAINED. " Where no income exempt from income tax was received, the minimum subscription can readily be ascertained by deducting £SO or £7O, as the case may be, from tho amount of income tax actually payable and converting the balance to the nearest multiple of £lO. For example, if the income tax ordinarily due and payable in February last was £93, the minimum subscription would be £4O in the case of an individual and £2O in the case of a company. If the lax were £96, the amounts would be £SO and £3O respectively. In cases where the income derived during the year ended March 31, 1939, consisted wholly or partly of exempt income—namely, dividends and other exempt income from abroad, income from farming land under £3,000 unimproved value, or tax-free interest —it will be necessary where the lax is likely to exceed.£so or £7O to compute the amount of tax which would have been payable on the basis outlined above. examples given. To assist persons not conversant with income tax matters, more particularly farmers who were exempt from income tax in respect of the 1939 farming income season and others whose principal source of income was exempt, Mr Nash produced a table showing the- approximate amounts of mirfimum subscriptions from people resident in New Zealand on their total income derived from all sources during the year ended March 31, 1939. This table shows that if his income is earned a single man with £6lO will be required to find £lO, and a married man on that income scale will not need to contribute anything. In the case of earned incomes of £7OO, single people will contribute £2O, and a married man, with wife only, £lO. In regard to incomes of £1,000,’ contributions will be made as follows: Single person, £7O; married man, with wife only, £6O; married man, with wife and one child, £SO; married man, with wife and two children, £3O. Single persons earning £2,000 will contribute £3lO, and a married man with wife .£300; ranging down to £240 for a man with wife and four children.

Another section of the table deals with unearned incomes. Under this section a single person receiving £520 will pay £lO, and a married man nil. Married people with no children will commence to contribute at the £SOO income mark, their contribution in that case being £lO. Those iecciviim unearned income of £I,OOO a >eai will pay as follows;—A single person, £110; married man with wife only, £100; married man with wife and one child, £9O; married man with wife and two children, £80; married man with wife and throe children, £7O; and married man with wife and four children, £SO. Those with incomes of £2,000 will pay £430 for single Persons, ranging doivn to £340 for a man with wife and four children.