AUSTRALIAN TAXATION

New Zealand Herald, Volume LXIX, Issue 21281, 7 September 1932, Page 12

AUSTRALIAN TAXATION

REVIEW OF INCIDENCE MORE EQUITABLE PLAN SOUGHT INQUIRY BY COMMISSIONER In his Budget speech in the Australian House of Representatives Inst Thursday the Prime Minister, Mr. Lyons, announce*] that the Government proposed to review tho whole incidence of taxation with a view to devising a more equitable distribution of the burden. It was proposed to appoint Mr. Justice Ferguson, who had had long experience on tho Supreme Court Bench of Now South Wales, a commissioner to examine bcth Federal and State taxation law with a view to the simplification and standardisation of direct taxation legislation. Mr. Justice Ferguson had offered to act without remuneration.

"Although the Government feels that there is certain taxation of a particularly onerous character which should be remitted at tho earliest possible opportunity," Mr. Lyons said, "it has not been found possible, except as to some items, to make any reduction of taxation. However, should it become apparent as tho year proceeds that such a course would be justified, tho Government will not hesitato to take the necessary action and ask Parliament to endorse it."

Mr. Lyons added that it was hoped that with the co-operation of the Governments and Parliaments of tho States it would bo found practicable to adopt uniform and simplified taxation legislation. Tho adoption of a common form of incomo tax return alone would save tho community much trouble and expense. Business Men's Proposals Proposals for consolidating and simplifying the taxation systems and administration in the Commonwealth were formulated by the taxation sectional committee of the Sydney Chamber of Commerce early in the year. Briefly, tho proposals provided for the institution of one taxation Act and one taxation master for the whole Commonwealth. Under a uniform assessment Act, covering the whole range of income taxation, a rate of tax would be struck annually to cover in each Stale, firstly, the Commonwealth tax; secondly, the State tax —not necessarily the same for each State, taxpayers in each State to be taxed on tho one assessment.

On th© subject of company taxation it was urged that this should be at the source only; or, alternatively, a company should be taxed only on its undistributed income and the shareholders taxed on the dividends in their hands. A progressive supertax, it was suggested, might be imposed 011 the tax payable by companies withholding from, distribution amounts in excess of 25 per cent of profits in any one year. The committee proposed a simple formula which would allow any taxpayer readily to estimate the tax payable on a specified incomo and be effective to check assessments, which is not the position under the existing Act. It was also suggested that incomo tax should be payable by instalment, quarterly or halfyearly. Anomalies in Rates

The committee also advocated the adoption of the system as applied under the English Finance Act of the method of differentiating in rate.<y to avoid what were termed "the appalling anomalies and injustice prevailing under the existing method of differentiation between personal exertion and property income." Provision was also sought for private companies to be treated on the same basis as a partnership. A claim was put forward for a clear definition of what constituted Australian and what ex-Australian income, and for exemption from tax on ei'-Australian income. The committee also asked that a clear definition of capital profits, as distinct from income, should be laid down, and that taxation of alleged income arising from sale of goodwill should be dropped. There was also sought a provision that in any class of transactions where the profits were taxable, losses should be deductable without limitation, and not be subject to the "opinion" or "determination" or discretion of the Commissioner or any officer of the department. The committee also proposed that the actual profits of the year should be the basis of tax and rate, losses arising in one year to be deductablo from profits of succeeding years up to five. The full right of appeal against assessments in all their phases was also claimed.