House of Representatives

Explanatory Memorandum

(Circulated by the Treasurer, the Rt. Hon. Sir Arthur Fadden)

Ed.Note

INTRODUCTORY NOTE:-

The main features of the Resolution and the Bill are-

Individual Taxpayers-

(1)

That the rates applicable for the last financial year 1950-1951 (based on income of the year ended 30th June, 1951) shall continue to apply for the current financial year 1951-1952 (based on income of the year ending 30th June, 1952);

(2)

That a special levy equal to ten per centum of the tax and contribution payable for the current financial year shall be imposed.

Public Companies-

(3)

That a primary rate of 7s. in the Pd1 shall be imposed on taxable incomes derived during the year ended 30th June, 1951;

(4)

That a special levy at the rate of 2s. in the Pd1 shall be imposed on taxable incomes derived during the year ended 30th June, 1951;

(5)

That an advance payment equal to ten per centum of the tax and contribution at the primary rate and the special levy shall be payable for the current year 1951-1952 and shall be credited against the company's liability for the financial year 1952-1953.

NOTE.-Super Tax at the rate of 1s. in the Pd1 on the excess of taxable income over Pd5,000 and undistributed income tax at the rate of 2s. in the Pd1 are not being re-imposed for the current financial year.

Private Companies-

(6)

That primary rates of 5s. in the Pd1 on the first Pd5,000 and 7s. in the Pd1 on the balance of taxable income shall be imposed on taxable incomes derived during the year ended 30th June, 1951;

(7)

That an advance payment equal to ten per centum of the tax and contribution at the primary rates shall be payable for the current financial year 1951-1952 and shall be credited against the company's liability for the financial year 1952-1953;

(8)

That the definition of "private company" shall be restated to clearly specify those companies to be classified as private companies for the purposes of the assessment of tax and contribution on taxable incomes derived during the year ended 30th June, 1952, and subsequent years;

(9)

That the amounts of distributable income derived during the year ended 30th June, 1952, which may be retained free from undistributed income tax shall be limited in those cases where two or more private companies are closely related.

Averaging of Incomes of Primary Producers-

(10)

That the effects of the averaging system shall be modified in any case where the taxable income derived by a primary producer during the year ended 30th June, 1951, or his average income, exceeded Pd4,000;

(11)

That each primary producer shall be given a right to elect that the averaging system shall not apply in the assessment based on income derived by him during the current year ending 30th June, 1952, and in assessments for subsequent years.

Age Allowance-

(12)

That persons of pensionable age, i.e., men over 65 years, women over 60 years, shall not be required to pay tax and contribution or special levy on income derived during the current year ending 30th June, 1952, unless the net income, in the case of a single person, exceeds Pd234, or, in the case of a married couple, the aggregate of their net incomes exceeds Pd468.

Service Pay and Allowances-

(13)

That pay and allowances earned by members of the Navy, Army, Air and Auxiliary Forces while serving since 26th June, 1950, in operational areas shall be exempt from tax and contribution.

Scholarships-

(14)

That income derived after 30th June, 1951, by way of scholarship, bursary or other educational allowance by a student receiving full-time education at a school, college or university shall be exempt from tax and contribution.

The following are notes on the paragraphs of the Resolution and the clauses of the Bill.