PAYING INCOME TAX

Wanganui Chronicle, 6 September 1950, Page 4

PAYING INCOME TAX

IT is generally accepted that the fairest form of all taxation is 1 taxation on income, provided it is based equitably. At present the system in vogue in New Zealand is that a taxpayer is assessed on this year’s income for payment next year. There is now a proposal that a “pay-as-you-earn” system be introduced, which would mean payment'of the tax by instalment as the income is earned—something on similar lines to deduction of social security tax from wages. Actually, the proposal has a lot to, commend it. Obviously it. will not mean the payment of less taxation, but payment as it fails due, rather than waiting for 12 months for a demand for accumulated tax. Tax taken from the pay envelope, while it is still a tax in every sense of the word, seems to fall less heavily in many eases than does a lump sum at the end of the year. Most taxpayers either put something by to meet that lump sum, or borrow by wav of overdraft to meet it at due date. Under the ivoposed new system they would pay gradually, and perhaps the test of whether the scheme is good or bad from their pointrot neu would lie whether they needed an overdraft for something' else at the year’s end. Whatever way the new scheme is looked at. Ihc obligation of the Government to impose a tax and the obligation of the taxpayer to par it, will remain. The question is, will it be easier to pay as you earn, or pay next year, m a lump sum. on last year’s income as at present?