Secondary tax study

Press, Volume CXIII, Issue 33382, 14 November 1973, Page 3

Secondary tax study

CN.Z. Press Association) DUNEDIN, November 13. The Government was considering ways of introducing optional methods for paying tax from secondary employment, but the tax rate was unlikely to be: lowered in the future,: the Minister of Finance, (Mr Rowling) said in Dunedin. “A possible way could be to make it a terminal tax, paid at the end of the financial year,” Mr Rowling: said. This would be at the taxpaver’s option. Instead of P.A.Y.E. instalments, there would be a lump payment at j the end of the financial year,: the Minister said. “It won’t reduce the amount of tax payable, but it (could assist people with two (jobs by giving them more money at the time they need it. “Many people with two; jobs today are young people wanting to raise enough for ja deposit on a house quickly,”: Mr Rowling said. “A termi-i nal tax would give them the: extra that would normally! be deducted under P.A.Y.E., but it would mean that they would receive a bill for a lump sum at the end of the I year. “This bill would consist of what should have been deducted by instalment under jP.A.Y.E., together with any

further tax payable on total! ! earnings. “The problem with secondary employment tax is not the tax rate, but the extent to which secondary employment earnings compound those of first employment. “Tax is payable on the [total earnings for the year,” Mr Rowling said. , “The rate for secondary employment is actually low—! [only 19c —and very few people realise this. “The rate was lowered 'from 21c by the previous 'Government, and this was! against the sound advice of the Department of Inland Revenue.

“People get a bill for more tax at. the end of the financial year under the present system because insuffiicient tax has been deducted from their gross earnings for the year.” Mr Rowling said that the only way to overcome people receiving an end of year tax bill would be to make the tax [rate for secondary employment higher. He said that the Government was considering what alternatives there were for giving more benefit from working at two jobs, but no announcement was likely for some time.