FARMERS AND INCOME TAXATION.
If the Government is nimble to further reduce taxation this year beyond the rebate grained to the land and income tax payers, it might at least levy the latter tax on a more equitable basis than it is doing at present, where the man on the land is concerned. The Auckland Provincial Conference of the New Zealand Farmers’ Union is directing attention to the very unfair practice adopted by the Department of not allowing the taxpayer to set off the losses of one year against the gains of another, ft is no argument in favour of the practice to say that our Taxation Department is merely following out the procedure adopted elsewhere—in Australia, for instance. There, the Taxation Commission has drawn attention to the necessity for a change in the method of assessing taxation, by showing the glaring injustice of the system adopted, under which it is quite possible for a man to he called upon to pay out in income tax, over a period of years, more than he receives by way of income, because of the lean years which follow those of plenty, and which eat up all tt man’s profits. Cases were brought under the notice of the Royal Commission, which has been taking evidence on the subject in which, over a period of live years, farmers and others have had losses in one year which have largely reduced the profits of the other four, and which have, when the income tax has been paid, wiped out every penny .of profit. Similar ease's probably happen hero in New Zealand. Take, for instance, the unfortunate experience of many of our farmers last year, who, with no income at all, had to meet the tax on their previous year’s income, all of which had been absorbed by the losses of last year. In the majority of eases the money required to meet the demands of the Taxation Office had to he borrowed, and the one thing i that made the borrowing possible was the rebate allowed for the prompt payment of the tax due, coupled with the It) per cent, lino which would have been imposed for non-payment. The Farmers’ Union, in asking that income tax should he assessed on a three years’ average of the actual income, or that, alternatively, tin* farmer should he allowed to carry the losses of one year 1 forward against the profits of the next ( year, is merely following out the recommendations of the Australian Com-| mission on Taxation so far as the first i proposal is concerned, with this differ-. once only, that the Australian Coin mis-j sion suggests either three or five years for the averaging, and in doing so, I points out that the man with a fixed income escapes more lightly than the man who gets his living by the land, owing to the uncertainly which attends the latter’s operations, and to the fact that tin' income of one year may he I largely, if not wholly, wiped out by the losses of the next. Something should certainly ho done to afford the fanner relief in eases of this hind, and the averaging of income, over a fiveyear period, seems likely to afford tho. best solution of a much vexed question.
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Bibliographic details
Manawatu Standard, Volume XLIII, Issue 420, 10 June 1922, Page 4
Word Count
546FARMERS AND INCOME TAXATION. Manawatu Standard, Volume XLIII, Issue 420, 10 June 1922, Page 4
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