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Tuesday, 25 November 1941

Mr LAZZARINI (Werriwa) (Minister assisting the Treasurer) . - 1 move -

That the word "twenty-five" be omitted, with a view to insert in lien thereof the word " twenty ".

As honorable members are aware, a company is liable to pay war-time company tax on the amount by which the taxable, profit exceeds a certain percentage of the capital employed. The law at present provides that, where the capital of the company is less than £12,500, that amount shall be deemed to be the capital employed. The effect of that provision is that such a company is assured of a standard of £1,000- that is, 8 per cent, of £12,50*' - and is therefore liable for tax only on the amount by which the taxable profit exceeds £1,000. When the bill, as introduced, prescribed a statutory percentage of 4 per cent., it became necessary to increase the minimum capital to £25,000 so that a company could still receive the benefit of a minimum standard of £1,000, viz., 4 per cent, of £25,000. The statutory percentage having been made 5 per cent.., it is necessary that the minimum capital should be £20,000.

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