Excess Profits Tax

Manawatu Times, Volume 66, Issue 208, 2 September 1941, Page 2

Excess Profits Tax

POSITION OF FARMERS At the meeting of the Southern Hawke’s Bay Provincial Executive of the Farmers’ Union on Thursday a circular was read from the Dominion secretary drawing the attention of provinces to an article on the excess profits tax in the union’s official organ, “Point Blank,” which should be carefully perused by all farmers liable to be called upon for the tax. The circular stated: “The provision of taxes to fix the normal income when the income of any or all of the three years, 1937, 1938, and 1939, was reduced by reason of bad seasons, flood, or pestilence should be noted very carefully. Some farmers whose income was down in one or all of these years believe they are liable for tax. This is seldom the case. When farmers receive excess profits tax notifications they should immediately examine their income tax returns for the years 1937, 1938 and 1939. If any or all of thse years’ incomes are below what the farm was reasonably capable of producing, they should immediately write and ask tho commissioner to fix the “normal” income of the farm, giving the reason (flood, bad reason, pestilence, etc.) why the income or incomes were down in the year or year., concerned. The same applies where extra capital has been introduced. The commissioner is regarding more head of stock carried as additional capital. The commissioner is also giving consideration to cases when the income has been increased due to increased exertions on the part of the taxpayer and his family. Where income is up because the taxpayer has been unable to carry out necessary maintenance work because he has been unable to obtain the necessary labour or material, this fact should be stated when communicating with the commissioner. In all cases when the commissioner is written to in regard to normal income, the fullest information should be given. Points to note: (1) Income may be down in the years 1937, 1938 or 1939 be cause of—(a) Flood or fire; (b) facial eczema, mastitis, contagious abortion, pulpy kidney, etc.; (c) poor seasonal conditions, grass grub, etc.; (d) sale of stock at low prices and purchase of stock for replacement at higher prices; (e) farming operations not carried on on particular property during all throe years; (f) farm not fully developed by 1937, 1938 or 1939. Cultivation or steady topdressing and pasture improvement may have been carried oa during these years, and the benefit reaped only in 1940-41; (g) loss of grass or clovor seed by wet weather, frost or wind. In many cases there was a successful harvest of grass or clover seed on some farms for the first time in five years; (h) poor lambing or big loss of lambs; (i) farmer may have been ill during one of these years; (j) unusually large area under fallow in any year. (2) Excess Profits Committee: Where s farmer is dissatisfied with the commissioner’s ruling iu regard to excess profits, he should appeal to the committee which is to be set up to deal with the matter. Head office will give any help asked for. Mr. G. Caminock said farmers should study these provisions very carefully and they owed a great deal to the Farmers ’ Union for securing the concessions, referred to.

Members agreed that the circular con tained much valuable Information.