Wednesday, March 1, 1972
40
The Financial Secretary explained that when the income for the year
1973/74 was returned a year later the tax assessment would be made and the
provisional payment set off against the tax assessed.
"An important feature of the transitional arrangements is that it is
proposed to drop out of charge the incomes of most taxpayers for the year ending
March 31, 1975. That is to say, if a taxpayer's income for this year exceeds the
income for the year ending March 31, 1972, by no more than 15 per cent the excess
will be disregarded."
He added that amounts in excess of this 15 per cent margin would be liable
to tax, but the Commissioner of Inland Revenue would arrange payment of the
additional tax by instalments.
No Acton 3
There would be no actual loss in terms of the total collection in
1973/74 under the new system compared with what the collection would have been
in 1973/74 under the present system.
In 1974/75, the second year after transition and subsequent years, a
new feature of the taxpayer's annual notice of assessment would be the adjustment
required when tax assessed for a year was more or less than the provisional tax
paid, he said.
Except in the case of permanent cessation of employment a taxpayer
would receive only one salaries tax assessment notice each year, he added.
"If a taxpayer can show that his income has been substantially reduced
during the year, he will be able to apply for a stand over of tax."
Under the present artificial preceding year basis of assessment the
taxpayer could not claim relief for a reduction in income and had to pay tax out
of his current year's income computed on the preceding year's income, Mr. Haddon-
Cave explained.
"This can cause difficulty whore a bonus payment in the current year is
considerably less than that for the preceding year," he said.
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