TAXATION ON FARMERS.

Timaru Herald, Volume CXXV, Issue 18498, 20 February 1930, Page 7

TAXATION ON FARMERS.

STATEMENT BY PRIME MINISTER. By Telegraph—Press Association. ROTORUA, February 19. The following statement was issued by the Prime Minister (Rt. Hon. Sir J. G. Ward) to-day, regarding income tax on farmers: — “My attention has been drawn to the leading article in a Wellington newspaper, where it is stated that the taxation legislation passed last session was underhand and furtive, and that the House was ‘tricke into passing the same. The reason for these extraordinary statements is the inference that it was not appreciated that farming income would be aggregated with income from other sources for the purpose of assessing income tax. Well, it is a fixed principle of taxation, and the general practice in New Zealand in assessing income tax is to make only one assessment covering all such income which is subject to taxation. This practice has been followed in dealing with the- income tax imposed on farmers. Where they have no source of income apart from the farm, the case is straightforward, and the farmer is only required to pay the land tax or income tax, whichever is the greater. Where the farmer has other income, however, the assesment is made in the whole of his income, and a deduction is made on account of the land tax. It cannot be said that the taxation legislation was rushed through the House, and if the provisions of the amsnei-ng Act are referred to, it will be found clearly provided therein that the assessable income of any person shall be deemed to include all farming profits in cases where the unimproved value of the farming land owned exceeded £l-1,000.

“As already stated, the law for many years has provided for one assessment on a taxpayer’s total assessable income from all sources. It would be unfair to other taxpayers to assess farming incomes separately. Figures have been quoted to show the alleged hardship imposed by the method of assessment, but actual figures could be quoted from cases where considerable benefit has been obtained by taxpayers who have made losses on their farming operations, by reason of the fact that such losses have been allowed to be set off against income derived from other sources, and a considerable reduction in tax has resulted. The business or salaried man pays income tax on the whole of his income, however derived, and in many cases pays land tax in addition. There is certainly nothing underhand and furtive_ in connection with the legislation, which is a portion of the policy, of the Government to obtain the requisite additional revenue from those who were considered best able to pay, and who have escaped their fair share of taxation for some years past.”