The Times. PUBLISHED ON TUESDAY AND FRIDAY AFTERNOONS. TUESDAY, MAY 29, 1917 FARMERS' INCOME TAX.

Pukekohe & Waiuku Times, Volume 6, Issue 279, 29 May 1917, Page 2

The Times. PUBLISHED ON TUESDAY AND FRIDAY AFTERNOONS.

TUESDAY, MAY 29, 1917 FARMERS' INCOME TAX.

A week ago we published a warning to our readers thai all farmers, in however small a way of business, were required to furnish to the Taxing Department, Wellington, not later than the Ist .lime, a return of their income f<>r llic year ending March 31st last. We thought il advisable to give a reminder of this because this year the Department is not sending out forms but leaving it to I lie taxpayer to obtain them himself Ironi the nearest I'ost office. The penally f.>r neglecting lo furnish a return, <>r for inaking an incorrccl one. is not less than £2 nor more llian L'loo with treble the amount of tax payable. The fixing of a minimum

fine thus puts il out of the power

of a Magistrate to accept any excuse, however reasonable, for failure to comply with the demands of the Department. It should further be noticed that this year that postage has to be paid when sending in the return.

The most striking departure from last year's practice lies in the fact that the special exemption of 7s per cent upon the capital value of the land used in the production of the income has been reduced to 5 per cent. When it is remembered that in addition to income-tax farmers have to pay land tax, and a surcharge on that land tax amounting to fifty per cent more, an impost that city lands are exempt from, it will be conceeded that in the coming year the farmer will be very heavily hit. Now that the mortgage-tax has forsome inscrutable reason been abolished it will he easily seen how infinitely preferable the position of the capitalist or of the man who has sold his land is to that of the farmer who still remains in harness. The reduction of the percentage of the special exemption will succeed in sweeping into the Treasurer's net multitudes who have hitherto escaped taxation of their incomes. We are afraid part Dof the form which deals with income derived from farming will prove full of pit-falls for those who have not kept careful accounts during the past year. Hundreds of farmers have never received the training necessary to enable them to keep accounts in a manner sufficiently clear to enable them to fill in correctly this complicated part of the return. And yet errors are a serious matter. Under-statements of expenditure may saddle them with heavy fines and the payment of treble taxation, while on the other hand over-state-ment of receipts or under-state-men t of expenditure will result in the payment of a heavier tax than they ought to pay. Any farmer who feels any doubt as to his competency to correctly fill in this part of the return will be well advised if he secures the assistance of his solicitor or some friend proficient in such matters.

Another hurdle will be found in the wages paid for labour on the farm. This is not allowed to include labour on improvements. The difficulty in a hundred and one instances will be to determine what is worknecessary for the production of the income and what can be considered merely as an improvement. As a rule a farmer only undertakes work at all with a view to increasing his income, and it seems almost impossible to discriminate between the two classes of work. For instance, if an old fence is pulled down and replaced by a new one we presume that w r ould be called an improvement. If, however, the old wires on a fence were replaced by new ones and a little later the old posts by new ones, that could not be classed as anything but repairs and maintenance, for which a deduction may properly be made. We are unable to understand why sales of stock for which payment has not yet been made should be included in the current year's income. It would have been thought that inclusion in the year in which the debt was paid was the only fair way. Some debts have an unpleasant habit of not getting paid at all and it can hardly be soothing to a lamenting creditor to know that he has paid income tax on money that he should have, but never will receive.

The direction to adopt a standard value per head for stock and to adhere to that value per head in subsequent returns, instead of putting them at their market value, is obvious. It the rate per head is put high and the selling value falls the Department will score in present taxation. If the selling value rises il will lake its toll when the stock is sold. If the rate per head is put low the Department will get its little hit also when they are sold. Let us advise our readers in dealing with this to walk warily, lest in seeking to avoid Sevlla tliev fall into Charyhdis.