TAXATION FIELD.

Auckland Star, Volume LXIII, Issue 140, 15 June 1932, Page 8

TAXATION FIELD.

WIDENING THE NET.

COLLECTION OF DATA. RETURNS FROM £200 UPWARDS. COMMISSIONER'S NEW ORDER. Although no further increases in the rates of direct taxation arc contemplated by the Government for this year, information which the Taxation Department is in the process of collecting raises more than a suspicion that a widening ,if the income tax net is one of the rods in pickle now being considered by Cabinet. This, it is suggested in some Huarters, will probably take the form of a substantial lowering of the so-called statutory exemption, and it will not bi surprising if the alteration- is so arranged as to give it the effect of »a bachelor and spinster tax.

During the recent session of Parliament speculation was rife as to the possible action the Government would take in the direction of altering the present personal exemption of £200, and it was then freely suggested that a tax on the unmarried" would be incorporated in any such scheme. No reductions were made, but evidence is now available that the issue has not been lost sight of and that something more may be heard of it later in the year.

In previous years persons whose income exceeded £250 were required to submit a return to the Taxation Department, notwithstanding that taxation was not payable by them by reason of special exemptions. According to a printed notice at present displayed in Ihe Taxation Office in Auckland, and issued by the authorities in Wellington last month, returns must be made by all persons -whose ; income exceeds £200. This requirement is a highly important one, since it will bring under the purview of the Commissioner of Taxes thousands of names which have not previously, appeared on the Department's riles. Conflicting Instructions. The extraordinary feature of the new ruling, however, is IJiat it has not been :,'iven publicity, and that it conflicts with the instructions that accompany the income tax return form obtainable from post offices. In this form it is definitely stated that returns ■ are required from persons whose income from all sources exceeds £250, whereas the Commissioner has laid it down in his latest proclamation that returns must be made where the income exceeds £200. The discord is obviously due to the practice so favoured by Government Departments of printing an endless supply of form 3, the use- of which has become regular. In the present instance there are doubtless thousands of No. 3 income tax" return forms still in circulation which contain the £250 return requirement. It is understood that over 300,000 were printed in December last.;

How' the Department expected the average person in receipt of £201 to know that he was obliged to furnish a return by • June 1 of this year is not clear; hut according to advices from Wellington much of the information sought from income • receivers on this' ■ scale has already come to hand. This apparently is the result of a ' circular forwarded to' companies, which stated: "For the purpose of more completely checking personal returns this year I shall .be glad if you will show- salaries and wages. of .£2OO and over." It is reported. that the daily mail of the Department in Wellington this month has been exceptionally heavy and that the staff has been, kept busily engaged in , handling the additional amount of correspondence. . A New Field. In asking for the first time for returns from those with incomes between £200 and £250, fdr that is the effect of the notice, the Department will become possessed of information which will . enable it to survey .a taxable field hitherto unexplored. A simple calculation in the light of the details returned will reveal to what extent the general taxation yield will benefit if, for example, it were ultimately decided to lower the statutory exemption from the present figure of £200 to, say, £220 or £210. Into the fold would come many who previously remained on the safety zone, and under the present rates, and even allowing for exemptions, it would appear that the additional revenue available would be well worth the collection. If Cabinet, in finally alopting a course along these lines, should also take advantage of the opportunity to introduce a bachelor and spinster tax, the scheme would conceivably provide for a lowering of the personal exemption to enable a differentiation to be made in favour of all married taxpayers. By that meaiiis bachelors and spinsters would pay an additional impost. Advance Payments. As a result of the fixation of the rates of income tax during the emergency session, the assessments will b?. available this year much earlier than in previous years, and if the Departmental machine works efficiently, there is no reason why taxpayers should not learn in two months' time the amount they will have to pay. The issue of earlier assessments will be essential to the success of the scheme for the payment of income tax in advance instalments. Advance _ payments can be made of as low an instalment as £1- and the taxpayer will he entitled to interest or discount for every complete month of payment. The total payments, together with the interest or discount, will be deducted from the tax payable, and if there is an excess the balance will be refunded.