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Wednesday, 20 May 1936


Senator LECKIE (Victoria) .- This clause provides that -

All losses and outgoings to the extent to which they are incurred in gaining or pro- ducing the assessable income, or are necessarily incurred in carrying on a business

.   . shall be allowable deductions . .

In the opinion of many taxation experts the inclusion of the word " necessarily " tends to defeat the object of the clause, which is to liberalize allowances. The Royal Commission on Taxation in paragraph 554 of its report, recommended that " all losses and outgoings incurred in carrying on a business for the purpose of gaining or producing the assessable income should be allowed as a deduction ". The inclusion of the word may also encourage litigation. I should like to know why the Commonwealth has departed from the recommendation of the royal commission. I understand that one State has declined to include this word in its draft bill.







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