Provision Made For PAYE Tax Refunds
(New Zealand Press Association)
WELLINGTON, August 27.
A Land and Income Tax Amendment Bill introduced and read a first time in the House of Representatives tonight gives effect to the Government’s proposals that taxpayers earning £lO4O a year or less should have the right to an annual review of their P.A.Y.E. deductions. Where overpayments have been made, they will be refunded. This provision applies to last year’s tax, as well as to the current year’s.
The Minister of Finance (Mr Nordmeyer) said that the Land and Income Tax Amendment Bill (No. 2) would be introduced later, to deal separately with changes to operate from April 1, 1960.
The clauses providing for a review of tax deductions on incomes of £lO4O or less would correct the most serious anomaly in the P.A.Y.E. system, said Mr Nordmeyer.
The new method of assessment would be to average the annual income over the 52 weeks, and ascertain the tax payable for each week from the P.A.Y.E. deduction tables. The sum of the 52 amounts would be the total tax payable. Any deductions in excess would be refunded. The benefits of the legislation were not confined to wage and salary earners, he said. Other taxpayers on £lO4O a year or less would be assessed on the same basis, and would also enjoy the benefits of the concessions built into the P.A.Y.E. tables. There were three ways in which overpayments might more commonly occur. The first was where there had been marked fluctuations in the amounts of weekly earnings during the year: the second where the person was employed for only part of the year; and the third where the deduction from bonuses or from secondary employment wages was too severe.
A clause provided for a change in P.A.Y.E. deductions and procedures for fruit, hops, and tobacco pickers, who were to be placed in future on the same basis as other casual agricultural workers. That would avoid the anomalies which might occur under the existing system, said Mr Nordmeyer. Aggregation
Among the other more important provisions is a clause which gives retrospective ’effect to the Budget announcement on aggregation of incomes of husband and wife.
Mr Nordmeyer said that for the 1958-59 and subsequent income years the incomes ol husband and wife would be aggregated for tax purposes only where each exceeded £650 a year instead of the previous limits of £520 a year.
Another clause provided for the full wife exemption to be allowed in the year of marriage. That would also be retrospective to the 1958-59 year, and replace the present provision allowing only a proportion of the full exemption in the year of marriage.
There was another provision for the full child exemption to be allowed, instead of a proportion, in the year of the birth of the child, regardless of the date of birth. That also applied to the 1958-59 year. Certain overseas visitors would be exempted from New Zealand tax, said Mr Nordmeyer. Under the existing law, overseas residents on a short business visit were liable for New Zealand tax on any salary earned during their visit, and paid to them by their overseas employer. The clause exempted from income tax the income derived by any visitor to New Zealand from professional or personal services performed in New Zealand, if his total period in this country did not exceed in the aggregate 92 days, and the income was subject to income tax in the country in which he was resident, and the services were performed for a person who was not resident in New Zealand. The exemption would not apply to income derived by public entertainers, such as theatre, motion picture, television, or radio artists, singers, musicians, dancers, lecturers, circus performers, boxers, wrestlers, athletes, and other professional sportsmen. Overseas Companies
Mr Nordmeyer, referring to another Budget statement dealing with reduction of taxation on overseas companies, not carrying on business in New Zealand but which made investments in New Zealand in approved national development projects, said that in such cases, if the income from investments or assets would attract a lower rate of income tax in the company’s country of residence. the New Zealand rate of ordinary income tax on that income was to be reduced to the equivalent rate in that country.
Any gratuity payable to an officer or soldier of the Territorial Force, not exceeding £6O in any income year, and paid on completion of a period of service in that force, would be exempt from
A clause provided relief in cases where a farmer was forced to sell livestock because of a disaster, such as drought, flood, and stock disease, or in the event of acquisition by the Crown or local authority, or on expiry of a lease. “The present position is that the difference between the selling price of the livestock and the standard values adopted for tax purposes would be liable for tax unless the livestock is replaced in the same income year. This clause provides relief from this liability where it is not possible to replace the livestock within the same income year as the forced sale,” said the Minister. Bonus Issues of Shares
ordinary income tax and social security income tax.
Another clause gave effect to the Budget announcement concerning bonus issues of shares by companies, he continued, “The main features of this provision were covered in my Budget speech, and these included the announcement that companies would be given a reasonable time in which to capitalise. Companies will be given till March 31, 1963, to take advantage of the provisions.” The principal amendment dealing with depreciation gave effect to the Budget announcement that excess depreciation recovered on the sale of a business asset might be applied against the cost of the replacement asset for depreciation purposes.
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Bibliographic details
Press, Volume XCVIII, Issue 28985, 28 August 1959, Page 12
Word Count
968Provision Made For PAYE Tax Refunds Press, Volume XCVIII, Issue 28985, 28 August 1959, Page 12
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