SECURITY TAXES

Evening Post, Volume CXXX, Issue 25, 29 July 1940, Page 9

SECURITY TAXES

METHOD OF PAYMENT

In this issue appears an intimation from the Commissioner of Taxes with regard to the liability for social security and national security charges on income and the social security registration fee. CHARGE ON INCOME. National security tax at the rate of Is in the £ is imposed in respect of all income subject to the social "security charge of Is in the £. It applies to the same persons, trustees, and companies as are liable for the latter charge, and is payable in the same manner and on the same dates. All the provisions of the Social Security Act, 1938, and the regulations made thereunder, relating to the social security charge, are made applicable to the" national security tax. In effect, the position is the same as if the social security charge were increased from Id for every Is Bd. (Is in the £) to Id for every lOd (2s in the £). The increase in the charge, however, is limited, in respect of income other than salary or wages derived during the year ended March 31, 1940, to the August, 1940, and subsequent quarterly instalments of the charge thereon. In respect of salaries and wages, the increase in the charge is limited to amounts derived in respect of any period after July 21, 1940. The three quarterly instalments of the current year's social security charge, on income other than salary or wages, due on August 1 and November 1, 1940, and February, 1, 1941 (computed on the basis of the old rate of Is in the £ on income derived during the year ended March 31, 1940), will be payable at double the amount thereof in each case and will be subject to a penalty of 10 per cent, on any amount not paid within one month of the respective due dates. Payments on this basis will be required in cases where only the May, 1940, instalment of the i social security charge has been paid. The immediate liability will be in respect of the instalment due on August 1 1940, which will be subject to a 10 per cent: penalty if not paid within one month of the due date. In cases where the four quarterly instalments of the social security charge have already been paid in full, the total national security tax payable for the current year will be an amount equal to a total of the last three instalments of the social security charge or three-quarters of the total social, security charge already paid in full. Salaries and wages will be subject to deduction of the charge at the increased rate of Id for every lOd or part thereof from amounts derived in respect of any period after July 21, 1940. The deductions are to be made and accounted for under the same j procedure as hitherto. j All persons, male or female, ordinarily resident in New Zealand, who have attained the age of sixteen .years, are liable for the combined social security and national security charges on income whether from salary or wages or from other sources. In the case of persons in receipt of a total disability war pension, however, the liability is limited, as previously, to the charge on salary or wages earned. Persons who are in doubt as to the extent of their liability are advised to make inquiry at the nearest moneyorder- office as early as possible during the month of August, 1940, in order to avoid penalties for late payment of any amounts they may be liable to pay during that month. * REGISTRATION FEE. A quarterly instalment (ss) of the social security registration fee payable by male persons twenty years of age or over becomes due on August 1, 1940. Failure to pay any instalment of the fee renders a defaulter liable, on summary conviction, to a fine of £5. In addition a penalty of sixpence per month (with a maximum penalty of 2s 6d) automatically accrues if payment is not made within one month of the due date. Any employer who employs for more than seven days a person who is more than one month in arrear with an instalment of the registration fee is liable, on summary conviction, to a fine of £20. Employers may deduct the amount of any overdue registration fees from the wages payable to employees.

The quarterly instalment registration fee coupon-books at present on issue to male persons expire with the August, 1940, instalment. New books covering subsequent instalments are to be issued when payment of the August instalment is made. Persons who have paid in advance are required to obtain a new book in accordance with the procedure outlined.

The liability with regard to the registration fee has not been affected by the national security tax provisions.