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Thursday, 27 November 1941

Senator KEANE (Victoria) (Minister for Trade and Customs) . - The insertion of the proposed new section 160 in the principal act is designed to pro vide an abatement of income tax in any case in which the effective combined rates of Commonwealth and State taxes, including Commonwealth war-time company tax, exceed 18s. in the £1. In any such case, it is proposed that relief shall be given by the Commonwealth to the taxpayers concerned according to the proportionate weight of tax imposed respectively by the Commonwealth and the States. For example, if the combined weight of the tax on each £1 of income is 21s., composed of 14s. Commonwealth tax and 7s. State tax, the relief to be given by the Commonwealth will be 2s. on each £1.

Senator Leckieasks what the position would be if the Commonwealth tax were 14s. in the £1 and the State tax 5s. in the £1. In such a case the rebate by the Commonwealth would be 14/19ths of ls. The question of any rebate by the States will be the subject of immediate consultation with the State governments. It is left to the States to contribute their portion of the tax abatement so that the combined Commonwealth and State taxes on income will not exceed 18s. in the £1. The proposed rebate will be applicable to companies as well as to individuals.

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