NEW SCALE OF TAXES

Press, Volume XCVIII, Issue 29010, 26 September 1959, Page 17

NEW SCALE OF TAXES

Changeover Time Clarified Mr N. A. Rowntree, the District Commissioner of Taxes, has clarified the issue of the time when the new tax rates to apply from October 1 become effective. He emphasised that the change in procedure which does not require apportionment of the tax where there are pay periods of one month or less stipulates “pay periods,” and not “pay days.” The effect is that if the pay period includes October 1 or any other part of October then the deduction is made at the new rates.

But where a pay period ends in September, even though the pay day is in October the tax deductions are at the present rates. Some industries have pay days which coincide with the end of the pay period, but there are many which pay wages and salaries on the day after the end of the pay period. Anyone whose working week or pay period ends on September 30 or before must pay the present tax whether the money is paid out on that day or the following day. Mr Rowntree explained that the new procedure not requiring apportionment of tax when the scales are changed is laid down in the Land and Income Tax Amendment Bill, which is now before the House of Representatives.

An explanatory note to the bill says that clause 36 prescribes the manner in which the amount of tax deductions is to be calculated in respect of a pay period that is current when the rate of tax deductions is altered by an annual taxing act or by an amendment made to the basic deductions.

The bill provides that for pay periods up to one month the tax deduction for the whole of the payment for the pay period shall be the amount of the altered tax deduction. It also lays down the apportionment procedure where the pay period exceeds one month.