Subsidies to Servicemen Exempt From Taxation

Manawatu Times, Volume 68, Issue 59, 11 March 1943, Page 4

Subsidies to Servicemen Exempt From Taxation

Per Press Association. WELLINGTON, Max. 10. A finance Bill consisting of two clauses was introduced ir. the House to-night and was read a first time. The Minister in charge of the Land and Income Tax Department (Hon. A. H. Nordmeyer) said the first clause dealt with the • provision made last year for the reduction of incomes of rabbiters and others in respect of social security payments. The other clause dealt with tlie exemption from taxation that existed in respect of subsidies paid by employers to employees on active service. The existing law had been challenged in the Court which had upset the interpretation previously placed on it. The Bill would do what was intended in the legislation passed m 1939. If the Bill did not go through then the Taxation Department would haVe to tax employers on the amounts they were contributing to their employees on active service and the State would stand to gain more revenue through the law as it now stood. The Bill provided that in calculating the assessable income of any employer tho Commissioner of Taxes may allow as deduction any moneys paid by that employer to any serving employee when he was satisfied that the payments had been made for the purpose of supplementing the income of tho serving employee. No deduction would be allowed in excess of tha rates of wages or salary and allow ances paid to the employee at the time he was called up or in excess of £4 a week. The assessable income of any serving employee would be deemed to include all moneys paid to him by his empolyer and all such moneys would be deemed to be earned income.' The payment of moneys by an employer to an employee shall not be deemed a gift within the meaning of the Death Duties Act 1921.