INCREASED, TAXATION THIS YEAR

Dominion, Volume 34, Issue 258, 28 July 1941, Page 6

INCREASED, TAXATION THIS YEAR

The statement that attracted most attention in the Budget was: “That therie will be no increases in taxation iff the coming year.” The supporters of the Government have referred to. it again and again and no doubt during the election campaign it will be heard continuously. It is not strictly correct, at any rate as to the total amount of direct taxation likely to be collected. . There will be no change in the incidence and rates of taxation, but if the average taxpayer thinks that he will only be called upon to pay the same amount as last year he will have a rude awakening.. There will be no increase in taxation rates this year, but there is likely to be a very much larger sum collected in direct taxation than was the case in 1940-41. The reason for this is that the national security charge on wages and income, 1/- in the £, did not come into effect until July of last year, and charges on certain other income covered only nine months, based on income for the previous period. This year the charge will cover the full twelve months, and as it is on the same basis as the social security tax the yield should be the same as from that rax. Last year the national security tax brought in £6,348,546 and the social security tax £10,109,577. This year, with the national income tending to'expand as a result of the war—the usual experience in most countries —the returns from both charges should be •■well in excess of the higher figure. Even if the social security taxation figures were stationary the national security charge would be brought up a further £3,800,000 and that represents an increased amount of taxation taken from the pockets of the people. Thus, though there is to be no increases in the rates of taxation, there must be a substantially larger amount taken from the community for the reason mentioned, and it should probably exceed £4,000,000.