SUBSIDISED WAGES

Greymouth Evening Star, 6 March 1943, Page 4

SUBSIDISED WAGES

R.S.A. AND APPEAL DECISION DUNEDIN, March 5. The executive of the Dunedin Returned Services’ Association gave consideration, at its last meeting, to a recent judgment of the Appeal Court, the effect of which is that employers, in arriving at their assessable income for taxation purposes, are not entitled to deduct ‘amounts paid as part of w r ages or salary to employees during their absence on service with the forces. By an amendment of the Land and Income Tax Act, made in 1939, it is provided that in calculating the assessable income of any employer, the Commissioner of Taxes may allow, as a deduction, any sums paid by the employer by way of wages, salary, or allowance to any employee in respect of any period after that employee has been called up for service in any of His Majesty’s forces. The amount that may be deducted is limited to the rate of wages, salary, or allowance, payable to the employee at the time he was called up, or £4 a week, whichever is less. The effect of the judgment given by the Appeal Court is that the 1939 legislation applies only where the employee has a contract of service with the employer, and that it therefore does not apply to the great majority of cases where, although the employer is bound to take the employee back into his employment on the completion of the latter’s war service, the employee is not bound to return to the employer. The view of the Returned Services Association executive was that the Act was intended to apply to all employees, whether they have a contract of service with their employers or not, and that as a large number of servicemen are receiving subsidies from their employers in the form of part wages or salary, it expressed concern lest the judgment would prejudicially affect the payment of such subsidies. In the interests of these men it has asked the Dominion Executive of the Association to take up the matter with the Government, with a view to having the Act a mended.