Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 2 April 1987
Page: 1948

Mr KEATING (Treasurer)(11.40) —I move:

That the Bill be now read a second time.

The Income Tax Rates Amendment Bill 1987 will amend the Income Tax Rates Act 1986 to declare the rates of income tax payable for the 1987-88 and subsequent financial years by companies, registered organisations and unit trusts treated as companies for tax purposes. The tax at the declared rates will be payable on incomes of the 1986-87 and subsequent years.

As announced in the September 1985 tax reform statement, the 49 per cent company tax rate to be declared by this Bill will bring the company tax rate into alignment with the maximum personal marginal tax rate, and will help defray the cost of the new imputation system that I outlined earlier for honourable members. The 49 per cent rate will also apply for unit trusts treated as companies. The rate of tax for registered organisations is to remain at 20 per cent.

The Bill will also declare a 49 per cent rate of tax payable by trustees on trust income of non-resident company beneficiaries in the 1986-87 and subsequent income years. A non-profit company that is not a registered organisation pays tax at full company rates only where its taxable income exceeds $2,542. Reflecting the increase in the company tax rate of 49 per cent, the threshold for non-profit companies is to be increased to $3,813.

Finally, as a consequence of the further lowering of the personal income tax rates from 1 July 1987, this Bill will declare lower rates of tax payable on incomes of some superannuation funds and ineligible approved deposit funds in respect of the 1987-88 and subsequent income years.

The additional revenue raised by increasing the company tax rate to 49 per cent will be $460m in 1987-88 and $475m in a full year. However, as I mentioned earlier, these revenue gains will be more than offset by the costs of the imputation arrangements. I commend the Bill to the House.

Debate (on motion by Mr Carlton) adjourned.