LAND TAX

Dominion, Volume 24, Issue 55, 28 November 1930, Page 10

LAND TAX

Last Day for Payment FARMERS’ POSITION Use of New Concession Land tax that remains unpaid lifter today will have a penalty of five per cent, added to it unless advantage has been taken of the provision whereby the amount can be paid with promissory notes at two or three months at a discount rate of seven per cent, in lieu of cash. No official information is available as to what extent this concession has been made use of, but it is believed that large numbers of farmers have adopted it as a means of gaining a little extra time before meeting their obligations to the Government in respect to land tax. Representatives of firms dealing in primary produce, accountants keeping the accounts for farmers, and those moving among the agricultural community, declare that they know from their own experience that the system of payment by promissory note is being extensively used. Many went so far as to say that in numerous cases farmers were compelled by force of circumstances to adopt this procedure. Postponement May Not Help. When the Government agreed to accept promissory notes for land tax, it pointed out that this would give farmers an opportunity of extinguishing the liability when they had received their wool cheques and returns from stock. Prices at the opening wool sale of the season, at Auckland a few days ago, are stated to be below cost of production, and with the present depressed state of the market for other kinds of primary produce, many farmers consider they will be unable to meet their demands even in the extra three months granted to them. They appreciate the consideration, extended to them, but in many cases, despite the utmost effort to reduce expenditure, present conditions are such that their balance will still be on the wrong side of the ledger after allowing for living and moderate working expenses. ' Taxation, at least the payment of it, is always more or less unpalatable, but if the tax is not paid by a. certain date a penalty is added. In addition the land is charged with the payment of the tax, just as if a mortgage had been given over it for the amount named in the demand. A man may die, leave the country or sell the land, but in spite of all these circumstances, the debt for the tax still attaches to the land. Time, it is said, heals everything, but it is a risky business to trust to' time to heal a debt for taxes. Wool Cheque for Rates and Taxes. The manager of a firm of stock and station agents—a man who is conversant with the financial position of farmers throughout the country—said he himself knew of a good number that had been compelled to take advantage of the provision whereby they could pay their land tax with a promissory note. “And the trouble is that it won’t help very much,” he added, with obvious concern for the position of the man on the land. “The land tax and local rates will absorb the whole of the wool clip on present values. The land tax is a very stiff thing. There is the cry for more production and still, more production, but it seems to be the thing to squeeze the life blood out of the farmer, with the exception of the very small one.” “If there is not a decided improvement in the prices received at the opening of the season's wool sale nt Auckland and a sharp recovery in the returns from other primary produce many farmers will be quite unable to meet their demands for land tax,” said the representative of another large stock and station firm with clients in all parts of the Dominion. “In n great number of cases the tax will be paid from capital, and everyone knows that that state of affairs cannot last for long, The income of many a farmer is quite insufficient to. pay his land tax after ho has met his living and other general farming expenses. When the land tax cannot be paid it means that the mortgagee is liable if there is a mortgage, and the Commissioner of Taxes can sue him and obtain judgment for the amount of land tax. In a case where there is no mortgage the owner will probably be forced to raise one to pay the tax. That cannot last very long.” Actually this year a land tax has been increased, for the five per cent, reduction, allowed last year to not provided for this year. -