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Wednesday, 20 May 1936

Senator LECKIE (Victoria) .- Sub-clause (1) paragraph (&) provides that sunns which are not otherwise allowable deductions, and which are paid by the taxpayer in the year of income to a fund to provide Individual personal benefits, pensions or retiring allowances for employees or dependants of such employees, shall be allowable deductions; and paragraph c enacts that sums paid to a retiring allowance or pensions fund for persons who are, or have been, employees or dependants of employees, shall also be allowable deductions. Paragraph al deals with calls on shares in a mining company or syndicate carrying on mining operations in Australia, or in any company carrying on afforestation in Australia as its principal business. It is contended that the limitation of allowance to the amount of the net income of the year should he removed. As regards the sums mentioned in paragraphs b and c, in most instances where a company or a firm establishes a fund or pays retiring allowances, it is under an obligation to make a contribution to the fund or to pay retiring allowances irrespective of whether it showed a profit or loss in any particular year. It is suggested that a company or firm should be allowed to carry forward, as an ordinary business loss, the excess of contributions over the profits for the year. The retiring allowance received by the ex-employee is subject to tax in his hands. Therefore, if the limitation mentioned is allowed to remain, double taxation will result. Payments made under paragraph- d may be for the purpose of carrying on a particular undertaking during an unproductive period, and, as the operations mentioned are of national importance, the conduct of them should be. encouraged. Sub-clause 1 stipulates that gifts to a public hospital shall be allowable deductions, and although paragraphs b and c seem to open up a wider field, a company or firm will not be allowed to deduct arrears of payments from" the income of the following years.

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