TAXATION LAW

Evening Post, Volume CXXV, Issue 58, 10 March 1938, Page 10

TAXATION LAW

AMENDMENTS MADE # •

EMPOWERING BILL

Several important modifications in the taxation laws were contained in the Finance Bill (No. 2), which was introduced in the House of Representatives last night by Governor-General's Message and read a first time.

Special provision is mndc for the assessment of income tax of petroleum mining companies. It is set out that the taxable income derived in any year by any company to which this provision applies shall be deemed to be the amount of dividend paid to shareholders in that year, but it is stipulated that a company shall not be deemed to have derived taxable income unless the aggregate amount of dividends exceeds the aggregate amount expended by the company and held by the Commissioner to be irrecoverable under this section.

The Minister of Finance (the Hon. W. Nash) said that, briefly,-the provision gave petroleum mining companies the right to provide for the recovery of thciv wasted assets before the dividends they paid were subject to tax. The Bill makes it clear that the concession does not apply to companies engaged in the refining, distribution, or transportation of petroleum. ■ ,

TAXATION YEAR.

Another clause deals with the taxation year. This provides that instead of furnishing a return lor any year ending on March 31, as prescribed by the principal Act, any taxpayer may, With the consent of the Commissioner, furnish a return for the year ending on the date of the annual, balance of his accounts, and in; any such case income derived during that year shall be deemed to have been derived during the year ending on March 31 nearest to that date. September 30 will be regarded as nearer to the preceding March 31 than to the succeeding March 31. .

Mr. Nash said that some companies had a 'different month in which to end their financial year. The existing procedure provided that the month nearest to March 31 was to be taken into account. The new procedure was designed to meet some of the tactics adopted by various companies for evading taxation. «

REMISSION OF PENALTY.

New provision is inserted empowering the Commissioner in certain cir-* cumstances to remit the penalty for non-payment of taxation by the due date. The clause states that on application for relief in this connection the Commissioner, .having regard to the circumstances, niay grant relief by the remission of the whole or part of such additional tax or in cases where the additional tax has been paid, by the refund of the whole or any part of it. A sub-section requires the consent of the Minister of Finance to relief in regard to amounts exceeding £25. The provision applies to tax payable for the year of assessment ending on March 31, 1938, but not to any previous year. ... Mr. Nash said that the provision should have been law for many years. Even during the short time he had been in charge Of the Income Tax Department there had been numerous cases where' the Commissioner had been unable to remit the penalty. During the past fortnight a girl had omitted to deliver a letter when it was handed to her and a penalty of £25 resulted which there was no power for the Commissioner to remit.

HARDSHIP CLAUSE,

, An extension of the hardship clause is provided in another section of the Bill. K the Commissioner is satisfied that the payment of taxation would entail serious hardship either on the taxpayer or oh a deceased taxpayers dependants he is empowered to waive the liability either wholly or in part and refund any excess payment. When the amount involved exceeds £25 the approval of the Minister of Finance is required. This provision operates only from the year of assessment ending March 31, 1938. , ' . A final clause in the taxation section relates to the liability of the State Advances Corporation for land tax, as mortgagee in possession, of lands comprised in mortgages transferred to the Corporation

Mr Nash said that the provision was to safeguard the Corporation in regard to. mortgages it was taking over for the time' being. ,