INCOME LEVY

Waikato Times, Volume 125, Issue 20921, 28 September 1939, Page 9

INCOME LEVY

NEW TAX EXPLAINED INDIVIDUAL IMPOSTS , EFFECT ON COMPANIES (By Telegraph.—Special to Times) WELLINGTON, Wednesday “The major principle of this bill is the complete isolation of war costs—both revenue and expenditure—from j all other Government finances,” ■ said the Minister of Finance, the I Hon. W. Nash, when moving the sec- ! ond reading of the War Expenses Bill in the House of Representatives ! to-day. All war expenses would be dealt with in the account, Mr Nash said, and ultimately it would come to Parliament for analysis and approval. Although the Government estimated that the amount required for war purposes for the remainder of the present financial year would be £9,750,000, the estimate could not be made with the usual degree of accuracy as it was not possible to forsee what might happen. If the necessity arose for expenditure beyond the estimate the money would have to be obtained from the Reserve Bank or from the public in the ordinary way. New Income Tax Illustrating the effect of the 15 per cent increase in income tax, Mr Nash said that a taxable income of £IOO. which at present brought £lO 8s 4d would return £ll 19s 7d on the new scale. A taxable income of £2OO would bring an extra £3.55, £3OO would give another £5 Is 3d, £SOO an additional £9 Is 3d, £2OOO an extra £55, £6OOO a further £350, and £790 another £SOB. The case of a married man with two children was typical of a large section of taxpayers, the Minister added. With an assessable income of £4OO he would pay an additional 15s 3d only. With £6OO he would pay £4 2s 9d more; with £BOO, another £8 0s 3d; with £IOOO, £l2 7s 9d more; with £2OOO, £4l 15s 3d more; with £SOOO, £204 more; and with £7900, another £419. A married man with two children did not pay income tax unless he had an assessable income of at least -350. Effect on Companies The effect of the new impost on company taxation was also outlined by Mr Nash. A company with a taxable income of £IOO would pay another £1 11s; £3OO would bring £4 19s more; £SOO, an additional £8 15s; £IOOO, another £2O; £2OOO, an extra £SO; £4OOO, another £140; £BOOO, an additional £440; £20,000, another £1187; and £50,000, an increase of £2968 15s. Tax on a company income of £50,000 would actually be increased from £19,791 to £22,760.

The Minister emphasised the importance of aviation in the Dominion’s defence needs. The sum of £3,500,000 had been set aside for the Air Force for the remainder of the year, he said, but if it were found possible to make greater provision for the training of airmen than present plans envisaged the Government would do that to the limit.