“PAY-AS-YOU-EARN” TAXATION

Wanganui Chronicle, Volume 88, Issue 35, 11 February 1944, Page 5

“PAY-AS-YOU-EARN” TAXATION

AUSTRALIAN PREPARATION REPORT LIKELY TO BE DISCUSSED SOON (Speoial Australian Ccrrcsnondent—N.Z.P.A.) Recd. 5.5 p.m. Sydney. Feb. 10. An early introduction of pay-as-you-earn taxation is believed to have been recommended by a special Federal Parliamentary committee which has been investigating the problem. The necessary legislation may be brought down during the present session of Parliament. It is understood that the scheme suggested will not wipe out the alleged present lull year's tax lag, but only three-quarters of this amonut. If the committee’s recommendation is adopted Australian taxpayers will have to pay 25 per cent, of one year’s tax in instalments spread equally over three years. This means that Australian in-come-tax rates would be 8 1-3 per cent, higher than at present for the next three years. The committee's report, to be tabled in Parliament soon, is believed to be a compromise between the views of its Government and Opposition members. Opposition members claim that there is no tax lag at present. Government members .claim that the introduction of pay-as-you-earn would cause a loss of a years taxation revenue. It is suggested that the new scheme would apply only to incomes earned by personal exertion- and the present system of tax payments would apply to all other Australian incomes. Strong opposition is being expressed to a suggestion that the Government should forego only 75 per cent, of the year’s “mythical” tax lag. The president of the New South Wales Taxpayers’ Association, Mr. McKellar White, commented: “The suggestion that the taxpayers should be burdened with 8 1-3 per cent, extra taxation for three years to pay off a mythical debt is barefaced robbery, and is nothing less than a brazen attempt to raise more revenue.” The president of the Constitutional Association of New South Wales, Dr. Frank Louat, said: “If the Government can see its way clear to forego 75 per cent, of the theoretical lag, why can’t a full 100 per cent be forgotten. If 8 1-3 per cent, is added to taxation for three years, the real basis will not be to make up any lag but to increase taxation.” Pay-as-you-earn taxation was introduced in Canada and the united States last year and will begin in Britain fvoffi April 5. The original British plan applied pay-as-you-curn only to those whose weekly wage or salary was up to £6OO yearly. Last week the plan was extended to apply to all personal exertion wage earners.