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Tuesday, 16 August 1960

It is estimated that, on the basis of existing legislation, collections of Income Tax from individuals in 1960-61 would be £490,000,000 or £47,836,000 greater than in 1959-60. The increase in 1959-60 was £53,199,000. This estimate of £490,000,000 for 1960-61 takes into account the full year effect of the 5 per cent, reduction in tax payable granted in the 1959-60 Budget. Net " pay-as-you-earn " collections in 1960-61 are expected to exceed those of 1959-60, due to higher wage and salary levels. However, although the increases in wage and salary margins granted in 1959-60 will apply for a full year and employment is expected to continue to increase, the rate of increase in wage and salary levels and hence of "pay-as-you-earn" collections is not expected to be as large as in 1959-60. Incomes of professional and business taxpayers, property owners and wool growers increased in 1959-60. Assessments based on these higher incomes will generally be issued in 1960-61 and consequently collections from this source will be greater than in 1959-60.

Discontinuance of the 5 per cent, rebate of tax together with the other changes now proposed will, it is estimated, result in a net addition of £20,035,000 to Income Tax revenue from individuals in 1960-61, thereby raising the estimate of collections from individuals in 1960-61 to £510,035,000.

It is estimated that, as a result of the generally higher level of company incomes in 1959-60, Income Tax collections from companies in 1960-61 would be £251,000,000 if existing rates applied, or £21,870,000 greater than in 1959-60. The general increase in rates now proposed is estimated to increase collections from companies in 1960-61 by £16,600,000 to £267,600,000.

The withholding tax scheme, which came into operation as from 1st July, 1960, in respect of certain dividends paid by Australian companies to non-residents, is expected to yield £4,500,000 in 1960-61.

On the basis of existing legislation, total Income Tax collections from individuals and companies in 1960-61 would, it is estimated, be £745,500,000, or £74,206,000 greater than in 1959-60. After allowing for the effect of the proposed changes announced in the Budget Speech, the estimated amount of collections in 1960-61 is £782,135,000 and the estimated increase on 1959-60 collections £110,841,000.

Item No. 5. - Pay-roll Tax.

Pay-roll Tax collections in 1959-60 were, at £55,161,000, £5,542,000 greater than in 1958-59.

With the expected increase in the level of employment and higher wage and salary rates, Pay-roll Tax is estimated to yield £60,000,000 in 1960-61, or £4,839,000 more than actual collections in 1959-60.

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