INCOME TAX PAYMENTS.

New Zealand Herald, Volume LXIX, Issue 21175, 6 May 1932, Page 11

INCOME TAX PAYMENTS.

THE INSTALMENT PLAN. MONEY IN ADVANCE. SAVING TO THE STATE. [BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Thursday. Provision for an allowance by way of interest on income tax paid in advance is one of the most interesting clauses in the Finance Bill. The Government's intentions in that connection were Announced a few days ago.

The official explanation of the clause points out that there is power under existing legislation for payment in certain cases of income tax in instalments, after the receipt of the assessment demand, and for allowing of a rebate in respect of such an amount paid in advance. However, very little use of that section has been made in the past. However, with heavier taxation now operating, it is desired to afford additional facilities to taxpayers to meet their obligations. Although a rebate would be allowed in such cases, a net saving would accrue to the Consolidated Fund in view of tho fact that previous accumulated surpluses had disappeared, and it' was now necessary for a great part of the year to finance ordinary expenditure by means of Treasury bills pending receipt of income tax, which is not payable until almost the close of the financial year. By encouraging payments in advance, interest would thus be saved on a corresponding amount of revenue and Treasury bills which would have had to be issued. The amount of interest to be allowed will bo determined from time to time by tlio Minister of Finance, and shall be based on every complete month in the period commencing on the date of payment and ending on the last day of such month as the Minister may fix in each year. The sum of all payments made in advance, together with interest, shall be deducted from the total tax payable. If the tax is less than such prepayments and interest, the balance will be refunded to the taxpayer.

BUILDING SOCIETIES. MINIMUM DEPOSIT FIXED. SUM OF £IOO PROPOSED. [BV TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Thursday. A clause i" the Finance Bill states that no building society is to accept a deposit of less than £IOO. This is to prevent building societies carrying on savings bank business.

OBJECTION TO THE CLAUSE. " DESTRUCTION OF RIGHTS."[BY TELEGRAPH. —PRESS ASSOCIATION.] ASHBURTON, Thursday. Mr. F. W. Watt, president of the Building Societies' Association of New Zealand, to-day sent a telegram to the secretary of the association, Wellington, stating that the clause in the bill would destroy the rights enjoyed by building societies for 60 years and would seriously impair their usefulness in promoting thrift and providing loan moneys to finance farmers and householders. Tho clause would curtail the opportunity of small depositors to deposit their savings to the best advantage, as societies provided safe investments on liberal terms. In effect, it would mean liquidating small deposits which in the aggregate amounted to a large sum. Repayments could not be made unless the mortgages were paid off.

Mr. Watts requested the executive to take energetic steps to secure the withdrawal of tho clause.

KATE OF EXCHANGE. EFFECT ON STATE FINANCES. NEW POWERS FOR MINISTER. [IIY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Thursday. A general enabling clause in the Finance Bill empowers the Minister of Finance to determine all exchange questions that arise in the course of the administration of the public finances. An official explanation of the clause states that arising out of the wide fluctuations in rates of exchanges in recent times, various questions had been raised as to the manner in which exchange should be dealt with in the public account, and the extent to which it should be taken into account.

Tho nature and purposes of receipts and disbursements abroad varied greatly, and different circumstances had to be taken into consideration in apportioning exchange costs, or in determining whether deductions or additions wer e to be made to overseas receipts and disbursements on account of the exchange. The matter was further complicated by the fact that cash received overseas was not remitted to New Zealand, but was applied toward meeting commitments* overseas, a corresponding adjustment being made in New Zealand transactions. At present, however, a large part of overseas requirements was being met by remittances from NewZealand.

The whole matter was purely a question of technical and financial administration, but as it. entailed various adjustments between accounts, and questions were constantly being raised as to the authority of such adjustments, it had been found necessary to bring down this clause enabling the Minister to determine, all exchange questions.