EFFECTS OF TAX CHANGES

Sun (Auckland), Volume III, Issue 753, 28 August 1929, Page 7

EFFECTS OF TAX CHANGES

“NO HEAVY BURDEN ON FARMERS” OFFICIAL’S REVIEW (The SUN’S Parliamentary Reporter) PARLIAMENT BLDGS., Tuesday. The effect of the new land tax proposals of the Government is reviewed in a memorandum from the CommissToner of Taxes, Mr. E. J. R. Cumming, who considers that the super-tax will not affect many farmers, and that the reduced mortgage will not fall heavily upon the taxpayers. The memorandum was outlined by Sir Joseph Ward, in the course of his reply to the Leader of the Opposition on the no-confidence motion. The Commissioner of Taxes stated: —“With reference to the taxation proposals contained in the Budget, I have to state that there are approximately SO,OOO farmers in the Dominion, of whom only about 25,000 pay either land tax or income tax. “The only proposal in the Budget which will add to the number of farmers paying tax is the reduction in the mortgage exemption. This will increase the number of farmers paj*ing land tax by about 550. It will increase the land tax payable by a further 1,650 farmers. The reduction in the mortgage exemption will not affect any farmer whose land is of an unimproved value of less than £5,000 and as shown above it only affects about 2,200 farmers, and most of them to a comparatively light extent. NO HUGE BURDEN “It is absurd, therefore, to suggest that a huge burden will be placed upon the farmers of the Dominion. It should be noted that the existence of mortgages does not necessarily indicate indebtedness in all directions. The mortgagor may hold mortgages or other income-earning assets of a considerable amount. Many taxpayers by mistake did not for years after 1924, when the mortgage exemption was increased to £IO,OOO, claim the mortgage exemption, and paid land tax on the lull unimproved value of their land. This indicated that although mortgages existed the owners were quite able to pay. They were greatly surprised subsequently to learn that no contribution or only a small contribution to the revenue was required from them. It should be clear that the mortgage exemption has been on too liberal a scale. SMALL FARMERS NOT AFFECTED “This will not affect any farmer whose land is of an unimproved value of less than £12,550. Small farmers will not, therefore, be affected. Out of the 80,000 farmers in the Dominion only about 1,750 own land of an unimproved value in excess of £12,500. It is clear, therefore, that only large holdings will be liable to the super tax. The revenue anticipated from this source is about £325,000. “Returns of income will be required only from farmers owning or leasing land of an unimproved value of £12,500 or over. As it is proposed to allow a deduction of the land tax and super tax payable from the income tax payable it is surprising that any objection should be raised to the proposal. Any additional revenue will represent the amount by which the land tax and super tax falls short of the taxation at present imposed on other classes of the community on their income. “It is not anticipated that any excess will be disclosed, except in the case of the very large holdings. If an excess exists, it should be collected in fairness to other taxpayers.”