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Thursday, 21 February 1980
Page: 296

Mr John Brown (PARRAMATTA, NEW SOUTH WALES) asked the Treasurer, upon notice, on 20 November 1979:

(   1 ) ls he able to say whether in the 1 979 South Australian election campaign, large amounts of political advertising were sponsored by employer associations and some individual companies.

(2)   Is he also able to say whether these employer associations made direct requests to their member companies for donations to sponsor these advertisements.

(3)   What action will the Government take to ensure that payments by companies for political advertising purposes are not claimed as a tax deduction under sub-section 51(1) of the Income Tax Assessment Act.

Mr Howard -The answer to the honourable member's question is as follows:

(   I ) and ( 2 ) These questions do not relate in any way to my responsibilities as Treasurer.

(3)   The Commissioner of Taxation, who is responsible for the administration of the income tax law, has advised that claims to deduct the cost of advertising are examined to determine whether there is a sufficient connection between the expenditure incurred and the derivation of a company's income to warrant the allowance of a deduction under section 51 ( 1 ) of the Income Tax Assessment Act. Unless it is established that expenditure on advertising is, in fact, necessarily incurred in carrying on a company's business for the purpose of deriving its assessable income, a deduction is not allowable for the expenditure.

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