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Wednesday, 3 June 1942

Mr CHIFLEY (Macquarie) (Treasurer) (11:33 AM) .- I move -

That the amendment be agreed to.

By clause 8 it is proposed that the deduction for State and territorial income taxes shall be withdrawn. This means that State and territorial income taxes paid by taxpayers during the year ending the 30th June, 1942, will not be allowed as deductions from income derived by them during that year. This proposal follows the recommendation of the Committee on Uniform Taxation which, in arriving at its recommendations regarding the rates of uniform tax which it suggested should he imposed, took into consideration the fact that such deductions would not be allowed under a system of uniform income tax. Representations have since been made, however, that State income tax paid in respect of the financial year 1941-42 shall be allowed as a deduction from taxable income for the purpose of ascertaining the amount upon which tax on the undistributed income of both public and private companies shall be levied. This is considered a reasonable request, and it is proposed that it be acceded to. The effect of the amendment will be that. State and territorial income taxes which have not been allowed as deductions in any assessment for any financial year will be allowedas deductions from taxable income for the purpose of ascertaining the undistributed income of a public company.

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