INCOME TAX EXEMPTIONS

Dominion, Volume 22, Issue 262, 1 August 1929, Page 11

INCOME TAX EXEMPTIONS

Sir, —Can you enlighten me on the following subject? Why is it that all residents of New Zealand who earn over £3OO a year have to pay income tax except the large and wealthy farmer? Unfortunately my education is so limited and I cannot fathom this conundrum. I am in business and have made a success of it in spite of my handicap in education. Last year my profits were £450 approximately, and when I sent in my income tax returns I found to my dismay that instead of being exempt for the full £3OO I was only exempt for £lBO. I have been told by friends since that as soon as we make the £3OO the exemption is reduced until the £6OO mark is reached, when no exemption is allowed at all. Is this correct? —I am, etc., SMALL BUSINESS. Masterton, July 25. [“The farmer does not pay income tax, but a heavy land tax, which is payable whether he makes a profit or a loss,” said Mr. E. J. Cumming, Commissioner of Taxes, when the points raised were submitted to Trim. “Business men pay both land tax and income tax, but to avoid double taxation, they are allowed a deduction from their income of 5 per cent, on the capital value of their own premises used for business purposes. “In an income tax assessment the ordinary exemption of £3OO is allowed up to £450 of assessable income. From £450 to £750 the exemption drops £1 for every £2 of increase over £450, so that at £750 the exemption is £l5O. From £750 to £9OO the exemption further decreases £1 for £l, so that at £9OO there is no exemption allowable.”]