The Bay of Plenty Beacon Published Mondays, Wednesdays and Fridays. MONDAY, 30th. SEPTEMBER 1940. FARMERS' TAXATION.

Bay of Plenty Beacon, Volume 2, Issue 219, 30 September 1940, Page 4

The Bay of Plenty Beacon Published Mondays, Wednesdays and Fridays. MONDAY, 30th. SEPTEMBER 1940. FARMERS' TAXATION.

MUCH relief will be felt by farmers at the assurance given >hy the Minister of Finance, the Hon. W. Nash, that the increase in the standard values of stock required for taxation purposes has no relation whatever to either social security or national security tax. In the face of his definite assertion it seems impossible that the Commissioner of Taxes should be able to substantiate the claims that national and social security tax should be payable upon the increase in capital resulting from the writing up of the value of stock upon farms. Yet many things have to be explained. As the days pass more and more requests are received from the Commissioner requiring that taxation returns should increase the standard value of stock in such a way that income tax shall not be effected, but so that social security— and presumably national security—tax will be payable upon the amount of the rise. Only a proportion of farmers' returns from this district have as yet been dealt with, yet the number is ste.adily growing of the farmers receiving letters of the type mentioned above. Of course, these might have resulted from an official of the. Taxation Office misconstruing the meaning of the relevant section. If that is so,, then he is in good company, for solicitors have, upon inquiring into the position, been of the opinion that legislation exists to support the Commissioner's action as outlined in his letters. Then again, powers might exist for this a,ction, but are not to be taken advantage of. But then against this is the following extract from the statement upon farm taxation by the Hon. Adam Hamilton:—"With the farmer who was not previously subject to income tax, referred to above, a difficulty arises in connection with the returns that he had previously been making for social security tax. In his social security tax returns, he adopted his own stock values, some of which may have been considerably lower than market value. The difficulty now arises when he is compelled to raise the values in his social security returns to the same as the values in his new income tax returns. This materially increases, in an artificial way, the amount he will have to pay for both social security and national security tax on this year's income. This statement shows quite clearly what Mr. Hamilton understands to be the procedure that is being followed —and that understanding is rather surprising in. view of the statement which he no doubt heard Mr. Nash make in Parliament. And though it seems impossible that the farmer, in view of Mr. Nash's statement, should be unfairly subjected to a capital levy of the type described, a definite statement of the procedure that is going to be taken, for the future as well as the past, is required to clear up this issue.