NEW TAXES

Wairarapa Times-Age, 12 July 1940, Page 5

NEW TAXES

LEGISLATION BEFORE PARLIAMENT SOME CHANGES IN PRESENT LAVA LAND AND INCOME LEVIES. (Ily Telegraph—Press Association.) WELLINGTON, This Day. Legislative effect is given to some of the taxation proposals in the Budget by the Land and Income Tax (Annual) Bill and the Land and Income Tax Amendment Bill, introduced in the House of Representatives last night. A brief explanation of the measures was given on their introduction by the Minister of Finance, Mr Nash, who said that while the annual Bill was concerned only with the levying of the rates of land and income tax for the current year, the amending Bill made various alterations to taxing ing procedure. “Tne taxation is entirely on the lines of the Budget,” the Minister said, “but there are some amendments to income tax law.” The Land and Income Tax Amendment Bill sets out the new procedure to be followed in levying income tax in “steps” as explained in the Financial Statement, increasing by 3d in the pound for every taxable £lOO, and ranging from 2s 6d to 12s. Maximum income tax is not to exceed in any case 15s 6d in the pound. The Minister explained that, with all the taxes, including the national security tax, the rate of taxation was not to exceed 18s in the pound. This provision had been made to prevent the tax running over 20s in the pound, which it would otherwise do on a part of a small number of incomes in the Dominion. The normal exemption of £5O for each child is to be extended to apply to tire incomes of persons who become guardians of children brought to the Dominion under any Government scheme. The clause making certain State departments liable for income tax specifically mentions the electric supply account of the Public Works Department, the Internal Marketing Division, the State coal mines account, and the National Commercial Broadcasting Service. ANOMALIES REMOVED. Certain anomalies are removed by another clause which, the Minister said, reduces in some cases the tax people have to pay. Exemption from income tax is granted in respect of income derived by way of monetary benefit from the Social Security Fund, and to income received as compensation under the Workers’ Compensation Act. This also applies to educational bursaries, payments from the National Provident Fund or by friendly societies, and to certain payments to trust accounts. Another clause provides for land tax to be deducted for income tax purposes in the year in which it is assessed. Provision for relief is made in certain cases where an unduly low standard of values for live stock has been adopted. In future there are to be standard valuations not exceeding 19s a head for sheep and £5 for cattle. The Minister said this was being done, in an endeavour - to avoid in future injustices that occurred when a farmer who had valued his stock at an' unduly low figure and then sold was called on to pay tax on the difference... Amendments are made to the de-, finition of dividends and to certain provisions affecting proprietary companies, with the object of removing anomalies in the existing law. Provision is made for the payment of income tax by instalments. It is stipulated that unpaid land tax is to constitute a charge on the land. In reply to a question by Mr Forbes (Opposition, Hurunui) whether income tax would have to be paid on the national security tax, the Minister said the tax could not very well be charged on the net income. He thought that in future income tax would apply to the whole income as at present. The Bills were read a first time.