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Tuesday, 25 November 1941

Mr JOLLY (Lilley) .- Last week I urged the Treasurer (Mr. Chifley) to give sympathetic consideration to the claims of companies which have sustained losses of capital. In my opinion, those losses should bc taken into account in the ascertainment of capital for the purpose of this legislation. A company with an original capital of £200,000, which has had to write off £100,000,. will be "allowed- to make a profit of only 2rJ per cent, on the actual subscribed capital before it becomes subject to the war-time company tax. An amendment which has been moved to the Income Tax Assessment Bill 1941 is intended to ensure, in the event of distribution by a liquidator and the application of income tax to the profits arising from the liquidation, that liability for income tax shall' not arise until the capital actually subscribed by shareholders has been replaced. The same principle should be applied in this measure. Companies which have had to write off a considerable amount of their capital are entitled to consideration of this sort. Under the existing practice, companies which consider that they have been treated harshly may appeal to the Board of Referees. The adoption of my proposal will obviate, to a large degree, the necessity for that.

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