New Scale Of Tax In April

Press, Issue 32333, 26 June 1970, Page 1

New Scale Of Tax In April

(From Our Parliamentary Reporter) WELLINGTON, June 25. A new scale of income tax which the Minister of Finance (Mr Muldoon) said would reduce the top rate of tax and adjust some irregularities in the middle-income groups was outlined in the Budget.

A new income tax scale will be introduced from the beginning of next April. It will be the same as the present scale for taxable incomes up to $2500, but will then drop and reach a maximum of 50 per cent at a taxable income in excess of $12,000.

Mr Muldoon said the maximum of 50 per cent was one of the lowest maximum rates of tax in countries comparable to New Zealand. Dividend income would be taxable at the same rate as other income by the removal of the present rebates, except for persons on lower income, and an increase would be given in the special exemption for life insurance and superannuation.

To improve the position of all married taxpayers, the wife exemption would be in-

creased from $240 to $275, making it equal to the present personal tax exemption. This exemption, as at present, would be reduced 'S for $ as a wife’s income increased above $375, so that the taxpayer with a wife earning more than $650 would receive no exemption.

Concessions will be backdated to April 1, 1970. DIVIDENDS.—The present rebate on taxable dividends will be abolished from next April, but to avoid hardship to persons such as widows on relatively low incomes but with significant dividends, it is proposed to allow a rebate of 10 per cent of taxable dividends, with a ceiling of $2OO at a taxable income of $2OOO.

LIFE INSURANCE.—The exemptions for life insurance and superannuation will be increased from $5OO to $7OO for taxpayers who are members of subsidised superannuation funds, and from $650 to $950 for others.