UNEMPLOYMENT TAX.

Thames Star, Volume LXV, Issue 18333, 3 November 1931, Page 3

UNEMPLOYMENT TAX.

WHO IS LIABLE TO PAY?

Statement by Mr. Coates.

THE POSITION EXPLAINED,

NO INCREASE AS YET

(Special to Star). WELLINGTON, Nov. 3

To clear up some doubts and misunderstandings as to liability for payment of the unemployment relief tax, the following statement was made to-day by the Rt. Hon. J. G.‘ Coates (Minister in Charge of Unemployment) :

“The payments now due by way of unemployment relief tax can be shortly described under three heads: (1) The quarterly instalment of 5/-, payable by men only. (2) The charge on income other than wages or salary received by men (irrespective of their total income) .during the year ended March 31, 1931. . X , (3) The charge on income other than wages or salary received by women who had a total income exceeding £250 during the year ended March 31, 1931*1

Men’s Levy

“A quarterly instalment of the levy amounting to 5/- is now payable by all men over the age of 20 years, the only exceptions are: (a) totally disabled war pensioners; (b) old-age pensioners and other persons in receipt of pensions under the Pensions Act, 1926; (c) Maoris who, however, must pay if they have elected in writing to become liable and have been approved by the Unemployment Board; (d) men who for the whole month of November are inmates of a public hospital or mental hospital, old persons’ institution or other charitable institution; (e) students at colleges or schools who are not receiving salary, wages or. allowances; (f) men over 65 years of age whose whole total income for the past three months has not averaged, more than £2 weekly, provided they have not obtained the Employment Board’s approval of their becoming contributors to the unemployment fund; (g) men who during the whole of November are through, mental or physical disability unable regularly to follow any occupation for a livelihood or whose income for the past three months has not exceeded £2 per week; (h) men who for the whole of October were registered as unemployed and received no income (all who have been relief workers at any time in October must pay the 6/-); (i) men who on proof of hardship have been exempted by the Unemployment Board.

Adjustment in Levy

“The levy was reduced on August 1, 1931' from 30/- to £1 a year; men who paid the-full 30/- levy due in December, 1931, are required to pay only 2/6 during the presentmonth. In any doubtful case tho contributor should take his coupon book to a postal money' order office for adjustment. Tax on ,1930-31 Income.

“All men who arc not wholly ex empt from the unemployment levy must now make a return of their income other than wages or salary received during the year from April 1, 1930, to March,3l, 1931. Sources of income that must be shown include net profits from any profession or business (including fanning), interest, including savings bank interest, credits to one’s account and including interest on tax free war loans) and dividends. Although these are exempt from ordinary income tax (rents, royalties, pensions, annuities, superannuation or generally all income with the exception of wages and salary, it does not include war pensions or compensation received under the Workers’ .Compensation Act. Every man who is liable must now make a declaration on Form lib 55 which is to be obtained at any postal money office; he must either give full particulars of his income (other than wages or salary) or declare that for the purposes of the unemployment tax he has sent a full declaration on Form U.B. 55a to the Commissioner of 'Taxes, covering his 1930-31 income. This form must be specially furnished and is additional to the ordinary return for income tax purposes.

Tax Payable

’'‘The unemployment charge is levied on two-thirds of the income for last year (other than wages or salary) and amount to 3d in the £ or more precisely Id for each 6/8 or part of 6/8, one-half of the charge is due to-day, the other half is due on February 1, 1932, but the whole amount may be paid ndw.

Exemptions

‘‘lt must be specially noted that temporary exemption from payment of the flat rate levy of £1 per yeardoes not affect a man’s liability to pay the tax on last year’s income The only persons exempt are totally disabled war pensioners, old age and other pensioners and Maoris who have not been specially admitted to the unemployment fund; all other men are liable to the tax on their income other than salary or wages for last jear. Farmers, “The .farm income on which tax is payable is the net income for last year after deducting such items as interest, wages paid for farm labour, payments for fertilisers, foodstuffs, etc. No deduction is to be made for household expenses, nor for payments for the farmer’s own services. To assist faimers in stat. ing their income a special form (/. B.° 58) has been printed and thi is obtainable at aiiy postal money order office. It should be specially noted that this form does not take

the place of the declaration which must be made (on. Form. U.B. 55 or Form U.B. 55a) in every case. Wiomen. “Returns must now bo made on Form U.B. 55 by women whose income from all sources for the year ended March, 31, 1931, was £250 or more. No return is required from women whose income was less than £250. The return either, may show that a declaration has been sent to the Commissioner of Taxes or may set out details of the' income received tax at the rate of Id for each 6/8 is payable on twothirds of the income other than salary or wages. As in the case of men, women may either pay on half of the tax now and one-half in February, or may now pay in full.

Tax on This Year’s Income

“In this summary I have made no reference to the charge of 3d in the £ which at the present time is’ benig imposed on all receipts by way of salary or wages. This was levied as from August 1, 1931, and in accordance with the law must be deducted by all employers. My statement refers to the general levy and to the tax on income othe than wages or salary; A word should be added to explain why Parliament was obliged to impose what appears to be- a retrospective tax, on a part of last year’s income. The general purpose was to impose a tax equitably on all income but for obvious reasons it could not be at once imposed on current income except where this takes the form of wages or salary. The value of other income cannot he ascertained until the end of .the year, }vhen receipts and expenditure can be totalled. It was therefore decided to levy the tax op two-thirds of last year’s income from sources other than wages and salary and on onethird of this year’s income other than wages and salary in the result it may be taken that the effect is substantially the same as if tax had been levied on one year’s income, but payment is spread over two or three instalments and what is a matter of no small importance -—the Unemployment Board is able to receive qt once a part of the moneys which it urgently requires. - l T have had occasion previously to mention the possibilities that the unemployment relief tax might he increased from 3d to 5d in the £• I am now pleased to be able to, announce that so far as this Parti a ment is concerned it will not be necessary to propose any increase. I trust that this statement will make clear some points in a subject that is somewhat obscure, hut to assist still further arrangements will he made during this week for the Commissioner of .Unemployment (Mr Malcolm Fraser) to speak briefly over the wireless ajid he will deal with some typical queries.”