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Tuesday, 29 September 1942


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

That the following new clause be inserted: - " 12a. Section seventy-eight of the principal act is amended -

(a)   By inserting in sub-section (1.), before paragraph (b), the following new paragraph : -

(a)   In the case of a taxpayer which is a company, gifts of the value of One pound and upwards of money or of property other than money which was purchased by the company within twelve months immediately preceding the making of the gift, made by the company in the year of income to any of the following funds, authorities or institutions in Australia: -

(i)   a public hospital;

(ii)   a public benevolent institution;

(iii)   a public fund established and maintained for the purpose of providing money for public hospitals or public benevolent institutions in Australia, or for the establishment of such hospitals or institutions, or for the relief of persons in Australia who are in necessitous circumstances;

(iv)   a public authority engaged in research into the causes, prevention or cure of disease in human beings, animals or plants, where the gift is for such research, or a public institution engaged solely in such research;

(v)   a public university or a public fund for the establishment of a public university;

(vi)   a residential educational institution affiliated under statutory provisions with a public university, or established by the Commonwealth ;

(vii)   a public fund established and maintained for providing money for the construction or maintenance of a public memorial relating to the war which commenced on the fourth day of August, One thousand nine hundred and fourteen or the third day of September, One thousand nine hundred and thirty-nine;

(viii)   a public institution or public fund established and maintained for the comfort, recreation or welfare of members of the armed forces of any part of His Majesty's dominions, or of any allied or other foreign force serving in association with His Majesty's armed forces; and

(ix)   the Commonwealth, when made for purposes of defence.'; and (b)by inserting after sub-section (1.) the following sub-section: - (2.) For the purposes of this section, the value of a girt of property other than money shall be the value of the property at the time of the making of the gift, or the amount paid by the company for the property whichever is the less.' ".

The purpose of this amendment is to allow to companies, both public and private, deductions of gifts to the institutions and funds mentioned in the amending clause. The deduction will replace the rebate of tax which is allowable under section 160 of the principal act. The effect of the amendment will be to place the concessional allowances for gifts made by companies on the basis that applied before the introduction of the system of allowing concessional rebates of tax.

The amendments effected by the Income Tax Assessment Act of June, 1942, provided, inter alia, that there should be substituted for the concessional deduction from assessable income pre viously allowed in respect of gifts, a rebate of tax calculated, in the case of individuals, at the taxpayer's personal exertion rate and, in the case of companies, at the rate of ordinary tax payable by the taxpayer.

By clause 31 of the bill, it is proposed that the rebate provisions, so far as they relate to gifts, shall not apply until the financial year 1943-44, and that gifts shall be allowed to all taxpayers as deductions from assessable income in assessments for the financial year 1942-43, i.e., from assessable income derived during the year ended the 30th June, 1942.

It is now proposed that, in respect of companies, the principle of the deduction of gifts from assessable income instead of the rebate of tax should continue to apply for the financial year 1943-44 and subsequent years.

Companies, unlike individual taxpayers, are liable to pay taxes on income additional to the ordinary income tax at the rate of 6s. in the £1. Both public and private companies pay taxes on undistributed income, and public companies are liable to pay super tax and war-time company tax.

All these additional taxes are based on the taxable incomes of the companies as calculated for ordinary income tax purposes. If a deduction for gifts is not allowed in computing the taxable income of a company, no relief from the additional taxes is granted to the company in respect of the gifts. The amending clause will remove this inequity.

New clause agreed to.

New clause 17a.







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