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Tuesday, 29 September 1942

Mr CHIFLEY (Macquarie) (Treasurer) . - I move -

That, at the end of proposed new section 72b, the following new sub-sections be added : - " (6.) Where, in any assessment, the amount claimed by the taxpayer to he an allowable deduction under sub-section (1.) of this section is reduced by the Commissioner in pursuance of sub-section (2.) of this section, the taxpayer may, within sixty days after service of the notice of the assessment, in writingrequest the Commissioner to refer the claim to a Board of Referees, and the Commissioner shall refer the claim accordingly. " (7.) Upon every such reference the Board of Referees shall determine whether the amount of the deduction allowed by the Commissioner should be confirmed, increased or reduced and every determination made by the Board under this section shall be final and conclusive. " (8.) The provisions of Division 2 of Part V. of this Act shall not apply in respect of any matter which, under sub-section (6.) of this section, may be referred to a Board of Referees.".

The clause provides for the allowance of deductions to taxpayers in respect of expenditure incurred in precautionary measures against enemy raids. Where, however, the expenditure creates an enduring benefit other than the benefit of protection from enemy raids, that expenditure shall not be allowed as a deduction. Differences of opinion may arise between the taxation authority and the taxpayer as to whether the expenditure has resulted in any asset of enduring post-war value to the taxpayer and as to the value of any assets so created. Under the present provisions of the act, a taxpayer who is dissatisfied with the decision of the Commissioner of Taxation on matters affecting his assessment has a right of reference to the Income Tax Board of Review. By the amendment, it is proposed to divert from the Income Tax Board of Review to the Board of Referees constituted under the War-time (Company) Tax Assessment Act cases in which the taxpayer is dissatisfied with the decision of the Commissioner in disallowing the whole or a part of his claim for deduction of the enemy raids precautions expenditure on the ground that an asset of enduring postwar value has been created by the expenditure. The functions of the War-time (Company) Tax Board of Referees are being enlarged in order to determine, in those cases that may be referred to the board, whether the special deductions for depreciation of plant and buildings used in connexion with the present war should be allowed. The Board of Referees is considered to be the appropriate authority to determine questions of a similar nature arising in claims for deduction of expenditure on enemy raids precautions.

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