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Tuesday, 25 November 1941

Mr JOLLY (Lilley) . - I ask the Minister assisting the Treasurer (Mr. Lazzarini) to assure me that clause 11 will not apply to an employee who holds only one share in a company for the purpose of enabling the enterprise to secure registration.

Mr.Fadden. - The clause does not apply to a nominal shareholder who is a signatory.

Mr.Lazzarini. - That is so.

Clause agreed to.

Clause 12 (Gifts and contributions).

Mr.LAZZARINI (Werriwa- Minister assisting the Treasurer) [9.8]. - Under clause 12 b of the bill, the deduction of calls paid to the companies and syndicates described in paragraph d of subsection 1 of section 78 will he discontinued.

The tax concession that should be granted in respect of calls paid to mining companieswas considered by the committee of members which was recently appointed. As honorable members have already been informed, the recommendation of the committee has been adopted by the Government. With the high rates of tax that it is nowneces- sary to impose in order to meet war expenditure, a deduction from income of the amounts paid as calls to mining companies would have resulted in the Commonwealth, in many instances, meeting thepayment of the greater part of the amount of the call. This result could not be accepted under present conditions.

The committee of members considered that a deduction in respect of calls paid to mining companies should be allowed to an extent which would allow substantially the same tax benefit as was enjoyed in pre-war years. The committee recommended that a deduction ofthe amounts paid as 'calls to mining companies should not he .allowed -as a deduction in arriving at taxable income, but that a rebate of tax on the amount of the calls paid should be allowed in the taxpayer's assessment at one-third of the rate of tax applicable to the taxpayer's taxable income. Provision for this rebate of tax will be more appropriately made in the division of the act which deals with rebates. Proposed new section 160a, dealing with rebates '©f .tax in respect of calls, has already been circulated as a part -of clause 22 of the bill. I propose to discuss that provision when the committee reaches that clause. At this stage, honorable members .are asked to agree to the omission of .paragraph d of sub-section 1 of section 78 .of Khe principal act.

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