STOCK VALUES FOR INCOME TAX

Bay of Plenty Times, Volume LXXVII, Issue 14884, 22 January 1949, Page 2

STOCK VALUES FOR INCOME TAX

NO ALTERATION TO PRESENT SYSTEM MR NASH AND FEDERATED FARMERS He could hold out no immediate prospect of any alteration in the present system of treating farmers’ livestock as trading stock for the purpose of income tax assessment, said the Minister of Finance (the Hon. W. Nash) in reply to representations from Federated Farmers of N.Z. last week. The Federation had asked that legislation should be enacted to alter the existing system of taxing a farmer in cases where he sold his livestock at market values which were in execess of standard values.

The principle involved was an important one, said Mr Nash, but he could see no practicable alternative to treating livestock as trading stock. While that was so regarded, the ordinary rules as to valuation and the inclusion as income of increases in value realised on sate had to be adhered to. It was difficult to find a method which would meet the objections of farmers and at the same time preserve equity among all classes of the community. Federated Farmers has since pointed out that in Canada and the United Kingdom, farmers’ livestock are treated for taxation purposes as capital assets.' In the United Kingdom, farmers have the option of treating their livestock for taxation purposes as capital assets or as trading stock, and what is practicable and equitable there would be practicable and equitable in New Zealand.

The present New Zealand system operated harshly on the store stock breeding farmer. He was a breeder rather than a trader in stock: his position was extremely difficult. The proposed amendment would not allow any type of farmer to avoid taxation but would be more just and equitable.