INCOME TAX

Hokitika Guardian, 17 December 1931, Page 3

INCOME TAX

HEAVY INCREASE IN DEMANDSEMBARRASSMENT FOR MANY PAYERS. ' WELLINGTON; December 13. Payment o'f land and income tax, for which demands will soon be issued, is likely to cause embarrassment to many taxpayers wliose'incomes have been considerably reduced since last year. The coming demands will be issued to cover returns of income for the year ended March 31, 1931, and assessments already sent out by the depafrtment show the unmistakable, effect of the recent direct taxation increases. In numerous instances taxpayers will he called upon to pay double and even treble the amount of taxation they had to find -in the previous VCar, and i’t is aslmost certain that hardship will he experienced by many individuals and companies in meeting their obligations. Taxpayers now are called' upon, to pay into the Consolidated Fund .levies calculated upon what is probably .a much higher rate of income than is,, being received at the present time. The due date lias not been notified yet, but unless the whole amount of the taxation is paid by that date 3 per cent, penalty on the amount of. taxation liable to he paid is imposed ; upon the defaulter'. Under the existing law there is no provision for allow-' ing a person to pay his taxation after the due date without the penalty „for late payment being made.

NO HOPE OF CONCESSIONS. The question has arisen whether the Government will make allowances for the difficult time, through which many taxpapers are ipassing,! and forgo’ the 5 per cent, penalty, allowing taxation obligations to ! he wiped off on'the instalment plan this year instead of ,/demanding the whole amount by a <lefined’ date. Present indications are that there is .absolutely no hope of any donceission of this nature being granted. An .effort was made to alleviate the burdens of land taxpayers last year by accepting promissory notes, but ft is doubtful whether this practice will l>e repeated this year. ,

The law concerning payment "of income tax is rigid and ’Parliament would have to pass a blending” legislation before anything: could be done to allow taxation f payment’s to be'made in instalments after the due’ date.' There is at present no intention on' the part of the Government To do: anything of the kinds** This being so, taxpayers will have to''meet; their obligations promptly or be subject to a 5 per cent, penalty. 1 V - *' THE VvEVENUE NEEDED. *

It is pointed 'out in official circles that any remission of taxation would l>e qujte impossible. Budgetary estimates': already s " have been revised to meet the changing. conditions and .the shole range of Government activity is dependent upon tlie estjmated revenue being ’received. Borrbtying. my means of ‘Treasury bills has been undertaken by itie Government in 'anticipation of revenue, arid a' serious position would be created if this revenue did hot materialise. For that reason alone much reliance is placed upon the returns from income and' land tax.

It w;W estimated in the main Budget presented by Mr Forbes at.the. end of July that income fax. would yield £4,230,000 and land tax-..* .£1,100,000 this year. The general., financial position became worse, ho.vyeyer, and with a heavy prospective decline in revenue the new Minister of Finapee.y.the Hon. W. Downje \yas forced ; to have further recourse toi income tax in order to strengthen the Budget. The result was that additional imposts, were placed on the income taxpayer and the necessary readjustments were, made in the incidence,, of land tax. The outcome was that the forecast of revenue from these Sources had to bo revised, and the October estimate was £4.935,000 from income tax and only £625,000 from land tax. PRIOR PAYMENT. Although it is most unlikely that any concession, will -be made to taxpayers in respect to payment-ort the due date, it is pointed out that -tliose who desire to doi. so may pay 4 their taxation in instalments throughout :the year and so escape the necessity i of finding what might prove an embarrassingly large amount in a lump 1 sum after the taxation demands have I ’-been issued. The present, law provides that a. taxpayer, on production to the Commissioner of Taxes or any other authorised 7 person of the notice of assessment of income itax for any year, may pay in advance any portion of the sum charged in income, tax for the year. Every person who makes this payment in advance is entitled ,/to interest on the amount of the .payment at the maximum rate for,, K fhp r ,time being allowed , on deposits,, inytlie .Post Office * Savings Bank fpru the;,;, period commencing on. the date ,of payment and ending on the day ,appointed as the due date of payment.,,.,.. This fact doe§ not appear to be generally known. for : mp\, great advantage is apparently; taken of the. provision by the general body of taxpayers. Interest is allowed only on payments of £lO or multiples of that sum, and it- is not given unless the payment is made not less than three months before the due date.