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Wednesday, 7 November 1973
Page: 1640

Senator Webster asked the Minister representing the Acting Treasurer, upon notice:

(1)   What are the current retention allowances, prior to impost of undistributed profits tax, permitted proprietary limited companies.

(2)   What level of retention allowance does the Government intend for proprietary limited companies.

(3)   Will the Acting Treasurer consider increasing significantly the retention allowance of proprietary limited companies so that they may be permitted, should they so desire, to increase their reserves as protection in times of economic hardship.

Senator Willesee - The Treasurer has provided the following answer to the honourable senator's question:

(   1) At present a private company may retain, free of undistributed income tax, the following proportions of its taxable income less primary tax payable on that income-

(a)   trading income- 50 per cent of the first $ 1 0,000; 45 per cent of the next $ 10,000; and 40 per cent of the balance,

(b)   property income- 10 per cent of property income other than dividends from other private companies,

(c)   dividends from other private companies- nil.

(2)   As I announced on 14 September 1973, it is proposed that for the 1972-73 and subsequent income years a flat retention of SO per cent of trading income will be permitted. The allowance for property income, other than private company dividends, is to remain unchanged at 10 per cent as is the nil retention in respect of private company dividends.

(   3 ) See answer to ( 2 ).

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