TAX OUTLOOK

Nelson Evening Mail, Volume 80, 29 November 1945, Page 4

TAX OUTLOOK

FUTURE PROSPECTS THE LEVY ON WAGES Wellington, Nov.. 28. There is intense interest in the lobbies of Parliament in the possibility of a pending reduction of 6d in the pound in the present level of social and national security taxes, but most observers would be surprised if any reduction became effective before next April, ihc beginning of the new financial year. It is the general opinion that the bulk of wartime taxation will remain for some time. Speculation is rife because between now and the end of the present session the Minister of Finance, Mr Nash, will bring down two important bills—a Land and Income Tax Amendment Bill and a Finance Bill. “CORRECTING ANOMALIES” The main object of the former will be to “correct existing anomalies,” as official sources put it. Provision will be made for the special depreciation allowance of 20 per cent on the cost of new plant and buildings. Mr Nash has since stated that this provision will apply both to farmers and manufacturers, but business interests are anxious to know the date when this new arrangement will come into force. This should be stated in the measure. The amending bill also will have lo make provision for the alterations to the exemption for a wife and children which were announced when the universal family benefit of 10s a week for each child was announced. As from next financial year the present exemption of £SO for each child will be abolished, while the present exemption of £SO for a wife will be increased to £IOO. THE SECURITY TAXES Taxpayers who may be hopeful that the 33 1-3 per cent war loading on income tax will be abolished or even reduced seem to be doomed to disappointment. No change in the rate is expected. Probably even more important in the public mind than the income tax rate, however, is the present levy of 2s fid in the pound for social security and national security taxes. With a general election next year, it would appear that the Government will have to make gome reduction. Some observers argue that the rate will be left unaltered until the next session of Parliament, which will be in time for the election. Others hold the view that the Minister of Finance may be forced to give some more immediate relief. There is ground for the belief that the levy will be reduced through the Finance Bill by 6d in the pound, operative from Ist April, 1946. A reduction in the wages tax of 3d in the pound would account for about £7,000,000.