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TAXATION DEMANDS

NO CONCESSION LIKELY.

ADDED, OBLIGATIONS. The payment of land and incometax, which demands will be issued next month, is likely to cause embarrassment to many taxpayers whose incomes have been considerably reduced since last year. Next month's demands will be issued to cover returns of income for the year ended March 31, 1931, and assessments already sent out by the department show the unmistakable effect of recent direct taxation increases.

In numerous instances taxpayers will be called upon to pay double and even treble the amount of taxation they had to find the previous year, and it is almost certain that hardship will be experienced by many individuals and companies in meeting their obligations. The taxation increases will fall most heavily upon those whose earnings have dropped since the taxationo year began. The economic position has not improved during the past year, and in a great number of instances incomes have f alien by a considerable amount. LATE PAYMENT PENALTY.

Taxpayers are now called upon (says the Dominion) to pay into the Consolidated Fund levies calculated upon what is probably a much higher rate of income than is being received at the present time. The due date has not been notified yet, but unless the whole amount of taxation is paid by that date, a five per cent penalty on the amount of taxation liable to be paid is imposed upon the deiaulter. Under the existing law there is no provision for allowing a person to pay his taxation after the due date without the penalty for late payment being added. The question has arisen whether the Government will make allowances for the difficult time through which many ■ taxpayers are passing and forego the five per cent penalty, allowing taxation obligations to be wiped off on the instalment plan this year instead of demanding the whole amount by a defined date. Present indications are that there is absolutely no hope of any concession of this nature being granted. An effort was made to alleviate the burdens of lands taxpayers last year by accepting promissory notes, but it is doubtful whether this practice will be repeated this year. The law concerning the payment of income tax is rigid, and Parliament would have to pass amending legislation before anything could be done to allow taxation payments to be made in instalments after the due date. There is at "present no intention on the part of the Government to do anything of the kind. This being so, taxpayers will have to meet their obligations, promptly or be subject to a five per cent penalty. RELIANCE ON TAXATION.

It is pointed out in official circles that any remission of taxation would be quite impossible. The budgetary estimates have already been revised to meet changing conditions, and the whole range of Government activity is dependent upon the estimated revenue being received. Borrowing by means of Treasury bills has been undertaken by the Government in anticipation of revenue, and a serious position would be created if this revenue did not materialise. For that reason alone much reliance is placed upon the returns from income and land tax. It was estimated in the main Budget presented by Mr Forbes at the end of July that income tax would yield £4,230,000, and land tax £1,100,OOOthis year. The general financial position became worse, however, and with a heavy prospective decline in revenue the new Minister of Finance, Hon. W. Downie Stewart, was forced to have further recourse to income tax in order to strengthen the Budget, The result was that additional imposts were placed on the income taxpayer, and necessary readjustments were made in the incidence of land tax. The outcome was that the forecast of revenue from these sources had to be revised, and the October estimate was £4,935,000 from income tax and only £625,000 from land tax. INSTALMENTS BEFORE DUE DATE.

Although it is most unlikely that any concession will be made to taxpayers in respect of payment on the due date, it is pointed out that those who desire to do so may pay their taxation in instalments throughout the year, and so escape the necessity of finding what might prove an embarrassingly large amount in a lump sum after the taxation demands have been issued. The present law provides that a taxpayer, on production to the Commissioner of Taxes or any other authorised persono of a notice of assessment of income tax for any year, may pay in advance any portion of the sum charged in income tax for the year. Every person who makes this payment in advance is entitled to interest on the amount of the payment at the maximum rate for the time being allowed on deposits in the Post Office Savings Bank for the period commencing on the date of payment and ending on the day appointed as the due date of payment. This fact does not appear to' be generally known, for no great advantage is apparently taken of the provision by the general body of taxpayers. Interest is allowed only on payments of £lO or multiples of that sum, and it is not given unless the payment is made not less than three months before the due date. .

Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/WAIPO19311217.2.29

Bibliographic details

Waipa Post, Volume 43, Issue 3389, 17 December 1931, Page 5

Word Count
871

TAXATION DEMANDS Waipa Post, Volume 43, Issue 3389, 17 December 1931, Page 5

TAXATION DEMANDS Waipa Post, Volume 43, Issue 3389, 17 December 1931, Page 5

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