TAX CONCESSIONS

New Zealand Herald, Volume 78, Issue 24133, 27 November 1941, Page 11

TAX CONCESSIONS

TWO AUSTRALIAN BILLS AMENDMENTS COST £1,500,000 WARTIME LEVY ON COMPANIES CANBERRA, Nov. '25 Two taxation bills wore amended in the House of Representatives and in the Senate to-day. The Federal Treasurer, Mr. J. B. Chifley, said that the concessions granted by the Government 011 the Budgetary legislation would involve a loss in estimated revenue of £1.500,000. The Income Tax Assessment Bill passed all stages in the House of Representatives after amendment. The principal amendment was modification of the proposal to tax the combined incomes of husbands and wives. Grouping will not now apply where a wife's income has been derived from her own personal exertion, or from property which she holds in her own right. In these cases the incomes of husbands and wives will be assessed at the rate of tax applicable to each individual income. Where a husband has transferred property to his wife the rate of tax applicable to the combined incomes will apply. Provision is now made for a rebate to individuals or companies whose combined State and Federal taxation exceeded 18s in the pound, the Commonwealth to relieve the taxpayer according to the proportion of taxation imposed by the Commonwealth and State, Subject lor Negotiations The State's part in this undertaking, the Treasurer explained, would be the subject of negotiations which would be commenced soon. Other changes included the relaxation of the Government's original proposals on calls made by mining, oil, and afforestation companies. The Treasurer accepted an amendment by Mr. Spooner (U.A.P.), wiping out retrospective taxation on income earned outside Australia. The amendment, which was carried on the voices, provides that tax on these incomes shall be paid only on those earned since the introduction of the Budget. £600,000 Less Revenue The Government accepted, in the House, an amendment moved by the Leader of the Opposition, Mr. Fadden, to the Wartime (Company) Tax Assessment Bill. This provides that the tax will not operate until a company has earned a profit of 5 per cent on its capital. The bill originally provided for an exemption rate of 4 per cent. Last week the Government defeated an amendment by Mr. Fadden raising the exemption rate to 6 per cent. Mr. Chifley said that the amendment would involve a reduction in yield of £600,000, but the Government would accept the amendment. The Senate later forced into the bill an amendment to limit the operation of the tax to a period ending six months after the war. This, Mr. Chifley had earlier indicated in the House of Representatives, was not acceptable to the Government. Voting in the Senate was on party lines and the amendment was agreed to by 16 votes to 14. In the House of Representatives the bill passed the remaining stages with amendments consequential to that moved by Mr. Fadden.