7
FRIDAY, DECEMBER 13, 1974
PROVISIONAL PROFITS TAX SYSTEM
******
THE PROPOSED PROVISIONAL PROFITS TAX SYSTEM WILL NOT INVOLVE THE PAYMENT OF A YEAR'S TAX IN ADVANCE AS HAS BEEN FEARED BY SOME PEOPLE.
EXPLAINING THE POSITION, A GOVERNMENT SPOKESMAN SAID TODAY THAT IF PROFITS ARE RISING, ALTHOUGH PROVISIONAL TAX IS PAYABLE TWO TO THREE MONTHS BEFORE THE END OF A MARCH ACCOUNTING YEAR, THERE IS EFFECTIVELY LITTLE, IF ANY, ELEMENT OF PAYMENT IN ADVANCE.
THIS IS BECAUSE THE PROVISIONAL TAX PAYMENT DOES NOT REPRESENT THE TOTAL AMOUNT OF TAX PAYABLE IN RESPECT OF THE FULL YEAR'S PROFITS, BUT IS SIMPLY A PAYMENT ON ACCOUNT OF THE CURRENT YEAR'S LIABILITIES. IN EACH CASE, THE FINAL ADJUSTMENT DOES NOT HAVE TO BE PAID FOR ANOTHER NINE OR TEN MONTHS.
THE FOLLOWING TABLES GIVE AN EXAMPLE OF WHAT THE POSITION IS 1-
YEAR ENDED ACTUAL
ACTUAL PROVISIONAL PROVISIONAL BALANCE OF BALANCE OF 31ST MARCH PROFIT
TAX
TAX PAYABLE FINAL TAX
FINAL TAX PAYABLE
1975
$ 80,000
1
1976
$100,000
$12,000
JAN. 1976
$3,000
JAN. 1977
1977
$140,000
$15,000
JAN. 1977
$6,000
JAN. 1978
1978 $200,000 $21,000
JAN. 1978
$9,000
JAN. 1979
1979
$250,000
$30,000
JAN. 1979
$7,500
JAN. 1980
EXPRESSED AS A PERCENTAGE OF THE ACTUAL PROFITS FOR EACH YEAR, THE PROVISIONAL TAX PAYABLE IN JANUARY OF EACH YEAR OF ASSESSMENT AND THE BALANCE OF FINAL TAX PAYABLE IN JANUARY OF THE YEAR FOLLOWING IS :-
1976
1977
1978
1979
ACTUAL PROFIT
$100,000
$140,000 $200,000 $250,000
PROVISIONAL TAX
FINAL TAX
12 %
3 %
10.7%
4.3%
10.5%
4.5%
12.0%
3.0%
AS ILLUSTRATED BY THESE FIGURES IN MANY CASES THE PRO- VISIONAL TAX WILL VARY BETWEEN 10 AND 12 PER CENT. +AND IN EACH CASE THE BALANCE OF THE FINAL TAX, TO BRING IT UP TO THE STANDARD RATE OF 15 PER CENT, IS NOT DUE FOR PAYMENT UNTIL NINE OR 10 MONTHS LATER+, HE SAID.
THE SPOKESMAN WENT ON TO EXPLAIN THAT IN A SITUATION OF FALLING PROFITS, THE PROVISIONAL TAX PAYABLE IN JANUARY EACH YEAR WOULD EXCEED THE FINAL TAX PAYABLE FOR THE WHOLE YEAR.
+HOWEVER, THE
•
No comments yet.
Private notes are available after approval.