Federal Tax Concessions

Northern Advocate, 5 March 1947, Page 5

Federal Tax Concessions

(12.30 p.m.) CANBERRA, This Day. The Federal Labour caucus has approved, without alteration, Cabinet’s proposed income tax concessions, which will operate from July 1. Caucus also approved a Cabinet plan to increase pensions by 5/weekly. Income taxation and the social services contribution will be reduced by £33,000,000 and the amounts upon which rebates for dependents are calculated will be increased. The Prime • Minister (Mr Chifley) announced further taxation relief of £1,000,000 covering concessional rebates to non-profit bodies, soil erosion and water conservation expenditure, losses of previous years in the mining industry, and gift and estate duty. FREE UP TO £SOO Features of the new tax plan, in which special benefit is given to taxpayers with dependents, are: (1) Exemption from income tax and the social services levy will be granted to a taxpayer with a dependent wife earning no more than £2OO a year and to others with dependents, up to a taxpayer with a wife and six children earning no more than £SOO. (2) A rebate will be granted for a father wholly maintained by a taxpayer, and rebates for dependents will be increased in the case of a wife, female relative or father from £IOO to £l5O. In the case of the first child under 16, a student or invalid children or an invalid brother the rebate will be increased! from £75 to £IOO and in the case of other children from £3O to £SO. (3) The combined income tax and social services contribution rates on incomes over £SOOO will be 15/- in the £l. (4) The basic rate of social services contribution commences again at 3d but rises by only a tenth of a penny for each £1 of income with a maximum rate of 1/- in the £l. (5) New rates of income tax, as distinct from the social services contribution, will commence when an income reaches £251 instead of £2Ol. The late of income tax payable averages approximately a tenth of a penny on an income of £251 in addition to the social services contribution and will increase progressively till a rate of 13/6 in the £1 is payable on that part of an income which exceeds £SOOO.

BIG REDUCTIONS Official examples 'of the new system arc as follows: A taxpayer with a dependent wife and three children will pay neither tax nor social services contribution if his income does not exceed £350 a year. His wartime tax was £24/14/-. A taxpayer with a dependent wife and four children will pay nothing if his income does not exceed £4OO. His wartime tax was £32/4/-. The total levy of tax and social services contribution payable by the majority of taxpayers will be less than half the wartime tax. This applies to taxpayers with a wife and two children earning up to £BOO a year or with a wife and one child earning up to £7OO. Persons without dependents will pay from 10.9 to 30.2 per cent less than at present, with the maximum reduction falling between incomes of £250 and £4OO a year. * Persons with a dependent wife will have tax reductions ranging from 100 to 9.9 per cent, with deductions of a third or over up to £6OO a year.