XN000022-1972-03-01 — Page 40

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.

-

-

147

Page 40Page 41