Many Persons Find New Tax Forms Puzzling

Press, Volume XCVII, Issue 28604, 5 June 1958, Page 12

Many Persons Find New Tax Forms Puzzling

*‘l am a former teacher with average intelligence and supposedly in my right mind, but I cannot interpret the gobbledegook tax forms. I pay an accountant to fill out my returns although I owe no tax.” That complaint was received by the United States Internal Revenue Service; but similar ones may be made to New Zealand’s Inland Revenue Department within the next month. Persons whose income last year exceeded £lO4O and owners of small businesses are finding that their taxation returns this year are much more complicated than they were before the introduction of P.A.Y.E.

The fortunate ones are those who receive less than £ 1040 a year from salary or wages and not more than £l2 a year in interest or investment society dividends. For them form-filling has ended.

The department itself realises that there will be some confusion, and at the top of its forms it has printed: ‘‘lf you have any difficulty in filling in this form, any tax office will be pleased to advise you on request.” The forms required from taxpayers have been at all s Post Offices for some time—returns are due on June 7 and have to be furnished not later than July 7—but this week an explanatory pamphlet for individual taxpayers has also been distributed to Post Offices. Special Assistance As well, the department has arranged for a special assistance service to be given to taxpayers. In all branches of the department tlfere are special facilities to handle inquiries and staff members have been instructed in the new system so that they will be able to assist inquirers. The inquirers have already begun flocking to the Christchurch office, and at most times of the day yesterday there were persons at every counter.

Departmental offices will be . going to country centres this ■ month to assist taxpayers, and the names of the towns and times of attendance will be advertised , by the department. The form causing the most , worry is 1.R.3, which must be filled in by persons whose income exceeds £lO4O including salary , and wages. The same form is used by businesses and professional persons, who as well as giving their income for the year ended last March have to provide a provisional income for the present year. Individuals with no unearned income or income other than that from which tax has been deducted at source can find their way moderately easily through the form. They have no tax to pay and can ignore calculation of provisional tax. Tax Calculation Others have the complication of calculating their provisional tax. In the past that was not necessary. A taxpayer provided the figures, the department told him how much he had to pay. Now he* must assess his tax, and assess it reasonably accurately, for there is a 10 per cent, penalty for under-estimation. 1.R.3 is a formidable form of six foolscap pages. The section for business income is a miniature profit and loss account. Individuals who must furnish returns are those who derive assessable income not taxed at time of receipt—rents, interest, business, farming, profession are examples—except where it consists solely of interest and investment society dividends of £l2 or less, and those who earn more than £lO4O a year. Some have to make two returns, a second form being required for social security tax for the year ended March 31, 1958. the first instalment of which is due on November 7 of this year. Farmers have a special form that demands even more information than that required of businesses. A person whose only income is salary or wages of less than £lO4O has no worry about forms for no return is required of him or her. For everyone else one

thing is clear. They should go to the Post Office, examine the forms to see which one or more are applicable to them; and then consult the Inland Revenue Department if they have any difficulty in completing the form. Accountants Benefit Public accountants will benefit. They have gained many new customers since the introduction of P.A.Y.E. More persons are likely to be seeking professional advice when they come to fill in the new forms. ‘‘lf anyone in the Government is pleased by the fact that the taxpayer devotes a large part of iiis working year to supplying the Government with money, there is nothing in the tax-collecting procedure to suggest it.” That is another American quotation that will be echoed in New Zealand this month.