TAX EXEMPTIONS

Te Awamutu Courier, Volume 72, Issue 6240, 10 June 1946, Page 5

TAX EXEMPTIONS

POSITION CLARIFIED STATEMENT BY MINISTER The exemptions to be allowed for income tax purposes this year were explained in a statement by the Act-ing-Minister in Charge of the Land and Income Tax Department, Mr Nordmeyer. He said he understood that there was a considerable amount of confusion as to what these were. “The position is that in respect of income derived during the 12 months ended March 31, 1946, the taxpayer is allowed an exemption of £l9O for his wife provided that her income does not exceed £5O a year,” said the Minister. “If her income is in excess of £5O, the exemption is reduced by £2 for every £1 by which her income exceeds £5O. Thus it disappears altogether when her income reaches £lOO. “So far as children are concerned, the Government has decided that in view of the fact that the income of most income taxpayers last year was not augmented by family benefit, the usual income tax exemption of £5O for each child should apply to the income earned for that year, notwithstanding the fact that family benefit on the universal basis has been payable as from April 1, 1946. Exemption for children should be claimed in the usual way.

“In addition to the exemption for children up to 18 years of age, an exemption may be claimed in respect of older children provided they are dependent on the taxpayer, and an exemption may be allowed by the commissioner up to £5O per annum. “To make the matter clearer,” said Mr Nordmeyer, “the married taxpayer with two children will not begin to pay taxes till his income exceeds £4OO per annum. He will have a personal exemption of £2OO, an exemption for his wife of £lOO, and an exemption for two children of £5O each, namely £lOO. This is in respect of tax, the returns for which are now being submitted, and payment of which is due in February of next year. “Family benefit is not, of course, taxable in any way, nor is it taken into account in determining the wife’s income.”