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Wednesday, 1 June 1960

Mr OSBORNE - I think the honorable member is referring to suggestions made in Port Moresby recently that the level of taxation under the new system is higher than it need be. The receipts from taxation under the new system have substantially exceeded the estimates that were made when the new income tax laws were introduced last year. It was pointed out then that the main purpose in introducing the new tax was not to gain further revenue, but to raise the required revenue by more reasonable and equitable means, and to enable the former export and import taxes to be abolished. The estimates of receipts from the new income tax were necessarily inexact because there was no past experience to work on, but the reason that the receipts have been higher than estimated lies in the increased prosperity of the Territory during the past year. It was due particularly to higher prices for primary products which were exported, especially copra, and to higher personal incomes due to the rise in wage levels during the year. A calculation has been made of the increase in the amount that would have been raised under the old system due to the increase in the value of primary produce exported. It has been calculated that no less than £600,000 more than last year would have been raised by taxation under the old system if it had been still in operation as a result of the higher value of primary produce exported.

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