House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Rt. Hon. Harold Holt.)

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL (NO. 2) 1959.

Introductory Note

As a consequence of the introduction of dividend withholding tax, it is proposed by this Bill to effect a drafting amendment in the Act declaring the rates of income tax and social services contribution payable for the 1959-60 financial year.

Dividend withholding tax is one form of income tax and social services contribution, but it is not intended by the Act mentioned to declare the rate of dividend withholding tax.

The purpose of this Bill is accordingly to ensure that in that Act "income tax and social services contribution" does not include dividend withholding tax, which is to be imposed by a separate enactment.

NOTES ON CLAUSES

Clause 1: Short Title and Citation.

This clause formally provides a short title and citation for the Amending Act and for the Act to be amended.

Clause 2: Commencement.

By this clause, it is proposed that the Amending Act shall become operative on the date that it receives the Royal Assent.

Clause 3: Imposition of Income Tax and Social Services Contribution.

By this clause it is proposed to insert a new sub-section (1A.) in section 5 of the Act declaring the general rates of income tax and social services contribution for the 1959-60 financial year.

The new sub-section provides that income tax and social services contribution payable under section 128B of the Assessment Act - that is, dividend withholding tax - is not imposed by the Act declaring those general rates of tax. It also provides that references in that latter Act to "income tax and social services contribution" shall not be read as including dividend withholding tax.