THE WAR LOAN

Manawatu Standard, Volume LX, Issue 264, 5 October 1940, Page 8

THE WAR LOAN

POINTS EXPLAINED. BASIS OF SUBSCRIPTION. Per Press Association. WELLINGTON, Oct. 4. Further explanations of the basis of the minimum subscription to the current war loan were made by the Minister of Finance (Hon. W. Nash) in a statement to-day. “The minimum subscription for individuals in general,” said the Minister, “is to be taken as the excess over £SO (calculated to the nearest multiple of £10) of the income tax which was payable in February last ill respect of income derived during the year ended March 31, 1939. In the c’aso of companies the minimum, subscription is the excess of income tax (also computed to the nearest multiple of £10) over £7O. “Where persons are in receipt of exempt income, that is income not subject to income tax, the income tax is to be computed as if that income were assessable income and. not as being income which is either wholly excluded from the assessment, or which is merely taken into account, for the purpose of increasing the rate of tax payable. “Exempt income to be taken into account in this way will include dividends from overseas companies (but not local companies) and other exempt income from abroad, interest from taxfree Government stock and from taxfree company debentures, also farming income where the land used had an unimproved value of less than £3OOO.

EXEMPT INCOME. “In short exempt income includes all income that was subject to the Social Security charge,” said Mr Nash, “but which was not assessable for income tax, and also all income derived from abroad and exempt from the Social Security charge because it has already borne a similar charge overseas. But it does not include dividends from New Zealand companies. Where no income exempt from income tax wa6 received the minimum subscription can readdy be ascertained by deducting £SO or £7O as the case may bo from the amount of income tax actually payable and converting the balance to the nearest multiple of £lO. For example, if the income tax ordinarily due and payable in February last was £93 the minimum subscription would be £4O in the case of an individual and £2O in the case of a company. If the tax were £96 the amounts would be £SO and £3O respectively. . . “In cases where the income derived during the year ended March 31, 1939, consisted wholly or partly of exempt income (namely dividends and other exempt income from abroad, income from farming land under £3OOO in unimproved value, or tax-free interest) it will be necessary where _the tax is likely to exceed £SO or £7O to compute the amount of the tax which would have been payable on the basis outlined above.” To assist persons not conversant with income tax matters, more particularly farmers who are exempt from income tax in respect to the 1939 farming income season, and others whose principal source of income was exempt, Mr Nash produced a table showing the approximate amounts of minimum subscriptions from people resident in New Zealand on the total income derived from all sources during the year ended March 31, 1939. This table shows that if the income is earned a single man with £6lO will be required to find £lO and a. married man on that income scale will not need to contribute anything. CASES QUOTED.

In the case , of earned incomes of £7OO single people will contribute £2O and a married man with a wife only £lO. while those with children will be exempt. Those earning £IOOO will contribute as follows: —A single ; person, £7O; a married man with a wife only, £6O; with a wife and one child, £SO; with a wife and two children, £3O. Single persons earning £2OOO will comtribute £310; a married man with a wife £3OO, and ranging down to £240 for a man with a wife and four chilAnother section of the table deals with unearned incomes. Under this section a single person receiving £520 will pay £lO and a. married man ml ; married people with no children will commence to contribute at the £6OO mark, their contribution in that case being £lO. Those receiving anjmearned income of £IOOO a vear will pay as follows: —A single person, £110; married man with a wife only. £100; with a wife and one child, £9O ; with a wife and two children, £7O. and with a wife and four children, £SO; while those with incomes of £2OOO will pay £430 for a single person, ranging down to £340 for a man with a wife and four children.