INCOME TAX

Gisborne Herald, Volume LXVI, Issue 20013, 11 August 1939, Page 4

INCOME TAX

EARLY ASSESSMENTS ISSUE COMMENCED BASED ON NEW SCALE SURPRISE FOR RECIPIENTS Despite the fact that the new rates of taxation provided for under the Budget have not yet been approved by Parliament, income tax assessments are being issued based on the changed scale. That the department has assumed, doubtless with the authority of the Government, that Parliament will not alter the proposed scale, has aroused criticism. Such criticism is based on the idea that approval by Parliament of decisions by the Ministry of Finance is considered lo be a mere formality.

On the other hand, however, income tax experts point out that notices now issued are assessments only, and not actual demands, and their receipt is an actual convenience to taxpayers in giving them early knowledge of the amount they are called upon (o pay. Wide Cast of Net Income tax assessments are usually issued from September onwards, but it is pointed out that the lowering of the exemption limit from £2lO to £2OO. the more regular employment in many industries, and rises in wage scales, will have brought such a huge number of additional persons into the taxation fold, that if the department did not start earlier than usual in its assessments, it would he unable to complete the work in time.

The usual time for payment fixed by Gazette notice is February 6 or 7, with 21 days’ grace. In the past, the issue of assessments has been a task that has demanded overtime work for several months in the Income Tax Department. The staff has been increased to deal with the situation this year. It is considered that a comparatively small proportion of adult male workers this year escaped the obligation to submit returns of income, each one of which has to be considered and checked. Precedent in Past. There is some precedent from the point of view of the department in issuing taxation assessments before ratification of rates by Parliament. It is the usual custom to issue land tax notices before then. This year’s assessments were issued over a month ago, the amounts being payable in November. The early issue of income tax assessments will perhaps enable the staff to deal with objections before the date' fixed for payment, a condition that has not been possible in many instances in recent years.

The assessment form now issued conveys information of the new rates, together with the words “Assessed at new rates.” The greatest surprise to many recipients, however, is not the early issue of the assments, but. the information they give of a taxation liability of an extent nor fully appreciated before. The difference made by the new scale, compared with the old, in many cases is very great.