PAID NO INCOME-TAX

Hawke's Bay Herald-Tribune, Volume 81, Issue 22, 19 October 1937, Page 4

PAID NO INCOME-TAX

-Preis Ausocxution.)

Farmer Benefits Under New Valuation CASjE BELIEVED TYPICAL

(By Teleferapb-

GiSBURNH, Last Nxgnt. Recent discussions in Parliament on taxation anomalies have brought to light a Gisborne experience which is said to be more or less typical of many farmers in the Dominion. In this case the farmer 's income this year shoived an increase of more than 50 per cent., but his income tax, which in 1936 amounted to £91, has been wiped out completely, while his land* tax has-heen reduced to less than one-third of its former lovel. As tho law stands at present a fariter does not pay income tax unless the uilimproved value of his land exceeds £3000, and tho consequence is that u reduction or au increaSe in Valuations raay have a far-reaching efl'ect not only v on local rqtes and land tax, but also ou income tax. This is demonstrated in the caso quoted. For the year 1935-36 this particular farmer had a net profit of £928 and he paid £32 10/"- in land tax and £81 in income tax. In 1936-37 his net profit was £i432, or 50 per cent. more than in the previous year, but his land tax was reduced to £10 16/8 and he was not liable for oue penny of income tax. An explanation lies in the valuation of his property, which comprises 1900 acres of sheep-farming land, entirely free from mortgage. In 1935 the capital value of the property was £10,000. and the unimproved value £7800. When the district revaluation took place these figures were amended to £9000 and £2600 respeetively. The latter figure for unimproved value, being below the £3000 mark, had the cffect of entirely exempting the farmer , from income tax.