to draw attention to the fact that whatever additional assistance may be provided will involve expenditure to be met by taxpayers as a whole.

52. So far as the contents of the form are concerned, we are satisfied that every effort is made to assist the taxpayer, as far as is possible, by the provision of directions and explanatory notes, and although various suggestions have occurred to us for the better display of the matter printed on the forms, we see no reason for criticising their contents generally, either on the ground of inadequacy or of lack of lucidity. We are of opinion that the further assistance of which the taxpayer feels himself in need is personal assistance at the hands of an expert in income tax law and practice, rather than assistance by means of additional printed matter.

53. We accordingly direct attention to the fact that in every town of importance there is an official of the Board of Inland Revenue, known as "H.M. Inspector of Taxes," at whose office the taxpayer may obtain information and guidance relative to his income tax affairs. On many of the forms in use at present, the taxpayer is invited to apply to this official for such assistance as he may require, and we recommend that, in all forms issued to the public for completion by them, a prominent note should appear to the effect that the Inspector of Taxes will assist the taxpayer where necessary.

54. Another suggestion made to us for the general assistance of taxpayers was that forms which are sent to the taxpayer for completion should be issued in duplicate, so that a copy of the information supplied might be retained by the taxpayer. Apart from the question of expense, we do not think this is desirable. Most taxpayers would regard the additional form as aggravating the complication, and we are sure that but a small proportion would use them. We understand that the request of a taxpayer who desires to be supplied with a duplicate of any form served upon him for completion by him would be acceded to, and we recommend that the note to this effect which already appears on certain of the return forms should be printed on all the forms issued to the public for completion by them.

THE GRANTING AND NOTIFICATION OF

ALLOWANCES.

55. A complication has developed owing to the circumstance that, whereas the separate heads of a person's income are taxed independently, he is entitled to allowances in respect of his income. viewed as a whole. For instance, an individual may have some investments taxed by deduction, property in various places, a business or profession in another place and salaried appointments, say as a company director, in other places. His properties, his business and his appointments are the subject of separate assessments in separate localities. It may well be that no one of these

sources yields income large enough to meet the allowances to which he is entitled, and even if the income from one or more sources is sufficient for this purpose, still it has to be arranged somehow or other where the allowances are to be applied and where the tax is to be collected in full.

56. Again it may be that the whole of his assessed income is insufficient to meet his allowances or he may have no assessed income. In the former case some and in the latter the whole of the total allowances must be made in the shape of a refund of tax which has been deducted from his investment income.

57. All these matters have led to complication which in a sense is outside the main purpose of the Income Tax forms or at any rate outside the purposes of the Income Tax Acts as originally conceived. We refer to it because stress has been laid upon it by a number of taxpayers who have communicated with us.

58. We are, however, informed on behalf of the Board of Inland Revenue that it is hoped to make arrangements to gather up from the various local authorities the particulars of each individual's income and to place the arrangements for the apportioning of the allowances exclusively in the hands of one of them. If this can be done it will obviate what is obviously a source of annoyance and confusion to a great many taxpayers, but we think it only fair to emphasise that this is a matter which will involve somewhat elaborate organisation and that the Revenue Authorities are entitled to be given time in order to achieve it.

59. Again, our attention has been drawn to the circumstance that claimants to repayment of Income Tax sometimes are allowed or repaid less or more than what is claimed, and that this raises a difficulty which they have no means of solving. It not infrequently happens that the income is insufficiently returned. In other cases it is not appreciated that so-called "tax free" dividends have for the purpose of repayment been taxed and so may afford material for a refund. In the former a smaller amount and in the latter a larger amount than that claimed is allowable. We think that in both classes of cases a statement should be furnished explaining the discrepancy, where any exists, and we understand that the Board of Inland Revenue are about to arrange for that being done.

60. To minimise the confusion caused by "tax-free" dividends. we have had it suggested by the National Citizens' Union that companies should be compelled by law to show upon the warrant the gross amount and tax represented by such "tax-free " dividend. We record the suggestion. It is not within our terms of reference to examine it.

61. Another difficulty which has arisen is this. The aggregate of the assessments upon an individual may not appear to afford scope for his allowances. If he has in fact paid or suffered deduction of further tax he is entitled to a refund. If this is the case it should have been apparent from his return of total income.

To protect him, however, the Board have devised two forms to be addressed to such persons with the object of eliciting information as to any further tax paid or deducted, by refunding which the allowances can be met. We append these forms (*Appendix IV). They are of course issued entirely in the interest of the taxpayer. 62. Lastly, in order that taxpayers may be satisfied that they have had the full benefit of the allowances granted to them by statute by reason of their marital and family circumstances, etc., the Board of Inland Revenue contemplate extending the existing arrangements as soon as circumstances permit, so as to ensure that, normally, a taxpayer shall receive annually a statement giving particulars of the allowances due to him under these heads and indicating the particular assessments from which such allowances have been granted.

63. If a statement of his allowances can be issued to every taxpayer it would meet a complaint in the case of partners whose allowances as individuals have to be credited against tax assessed on the firm. At present the allowances are often communicated as an unapportioned sum, which causes inconvenience. On the other hand, if it was stated how they were arrived at matters would necessarily be revealed to partners which the individual affected might consider did not concern them.

64. As regards the forms themselves for claiming repayment of income tax on account of the personal allowances and reliefs we think that, subject to minor suggestions for improvement in matters of detail to which we have drawn the attention of the official witness, and possibly to better printing and spacing, no criticism upon them is called for.

PARTICULAR FORMS.

65. We propose to deal first with the problems presented by the different forms in their character of demands for returns for assessments solely. The Notices of Assessment and Demand Notes will also require our consideration. Copies of the existing prints are enclosed in Appendix II.

SUPER-TAX.

66. A broad distinction exists between Super-tax and Income Tax. The Super-tax is a very simple tax which is assessed in a single sum on the individual liable. The liability is determined by the amount of the income of the previous year for Income Tax purposes. Moreover, it is devoid of personal allowances and reliefs. The complications of the Income Tax we have already noted.

67. When, therefore, it is pointed out, as it has been to us, that Super-tax is collected upon a very simple form and it is asked why Income Tax cannot be dealt with on the same lines, it is only necessary to say that the two cases are not comparable.

[* The forms are not reproduced.]

68. We may at once dispose of the Super-tax form. No important criticism upon it has been brought to our notice and we do not think we can usefully offer any suggestions for its improvement. One or two verbal improvements have been suggested or have occurred to us of which note has been taken, but it is not necessary to mention them here.

SCHEDULE A FORMS (Nos. 1 & 2 IN APPENDIX II).

69. As regards the forms of return and notices of assessment relating to tax under Schedule A, it may be mentioned that a re-assessment of the annual value of lands and houses is made only at intervals of several years, but in view of the present reassessment some amount of attention was naturally given by witnesses to the forms used in this connection. The Land Union complained of the difficulty experienced by Land Agents in obtaining particulars of repair deductions. There is some anomaly in the system whereby the amount of tax borne by the landlord is settled with the tenant who merely deducts it from his rent. This, however, is the scheme of the Act. To notify separately all property owners of the deductions made for repairs would involve more cost than would be justifiable.

70. In this connection we wish to point out what appears not to be understood that relief on account of maintenance of property may be claimed before the tax is paid.

71. We have come to the conclusion that apart from certain minor matters which we have brought to the notice of the official witness, no serious criticism of these forms is required. In this opinion we are supported by the evidence of an important organisation of property-owners.

SCHEDULE B FORMS (Nos. 3 & 4 IN APPENDIX II).

72. The forms relating to tax under Schedule B concern only the occupiers of lands and of woodlands. We have received no evidence of any general dissatisfaction with the existing forms, except that the form of account provided for the use of farmers whose profits in any year fall short of the annual value assessed is alleged to be unduly complicated.

73. As regards this form of account (No. 4 in *Appendix II), we have been informed by the official witness that the form was prepared after consultation with a number of representative agricultural organisations. In these circumstances we have considerable doubt whether any alternative form that might be devised would meet with general approval by the taxpayers for whom it is designed. The Inland Revenue Department, however, have undertaken to review the form in consultation with the various organisations and to consider such suggestions as have reached us.

[* The forms are not reproduced.]

THE SCHEDULE D RETURN FORM No. 11.

(No. 5 IN APPENDIX II.)

74. Just as Schedule D is the most extensive of the Schedules into which the tax is divided, so is the principal return form relating to this Schedule the most complex of the forms, and we have been informed that it is to this form that criticism has in the past been principally directed.

75. In main outline the form consists of

(a) the requirement of a return of income for assessment under six heads corresponding with the " cases into which Schedule D is divided in the Income Tax Act of 1918;

(b) the statement of total income from all sources for completion by a taxpayer claiming the personal allowances, and provisions for particulars of the claims;

(c) notes and directions for the information and guidance

of the taxpayer.

76. Variants of the main forms are provided for the use of companies and firms (see No. 6 of *Appendix II) and of persons domiciled or ordinarily resident abroad. We have considered the suggestion that a separate form should be provided containing only the requirement of a return of the profits of trades, professions and vocations, and the explanatory notes relative to that requirement, and that another variant excluding these particulars should be issued to persons not engaged in any trade, profession or vocation. Whilst this suggestion has certain theoretical advantages, it must be remembered that it is the duty of the Revenue officers to demand a full return (Income Tax Act, 1918, Section 100), and apart from the fact that it would be inconsistent with the statute, the proposal involves giving powers of discrimination to local assessors which they could not in every case be safely entrusted with. Moreover, we doubt whether in practice it would effect any substantial simplification.

77. We have also considered a number of suggested substitutions for the existing form, and although we have benefited from the close examination of these detailed proposals, we are unable to recommend any of them for adoption in toto.

78. As already stated, we append a draft of this revised form which we recommend as an indication of the lines on which improvement might be effected. It consists of eight pages instead of four, as in the case of the present form, and the explanatory notes also occupy eight pages. Although we have found it impossible to reduce materially the amount of printed matter on the form, we consider that if the printed matter were better spaced, and a large type employed in printing it, as would be possible if an eight page form and an eight page enclosure were adopted, the taxpayer would find it a great improvement.

[* The forms are not reproduced.]