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Wednesday, 6 August 1930


Senator DALY (South Australia) (Vice-President of the Executive Council) . - If the amendment is agreed to, the clause will be ruinous. The Com missioner would then have to prove- that the company had been formed solely for the purpose of evading taxation. I think that the honorable senator has misinterpreted the section. In its present form it provides that the Commissioner may deal with companies which have been formed for various purposes, included among them being the evasion of taxation, but if the words "inter alia" are omitted he would be restricted to com panies formed for the express purpose of evading taxation. Instead of imposing a hardship on taxpayers, the clause in its present form provides them with some measure of relief, for it allows the Commissioner some discretion in cases of hardship. The clause is consistent with the principles ordinarily followed in legislation of this kind. I urge the committee to reject the amendment.

Amendment negatived.

Senator Sir GEORGEPEARCE (WesternAustralia) [4.37]. - Sub-section 2 of' the proposed new section 21a provides that -

For the purposes of this section the expression " shares held by or on behalf of " or any expression of similar import, includes any share held by or in the name of - -

Then follow the various classes of shareholders affected. The words of which sub-section 2 gives the definition appear in sub-section 1, which provides that the Commissioner may exercise a discretion as to whether a company has been formed, among other reasons, for the purpose of evading taxation. In arriving at a decision the Commissioner takes note of the way which the shares are held, namely, as set out in paragraphs a, b, and c of sub-section 2. The word " includes " in sub-section 2 is too embracive. I suggest. that it be left out and the words "shall mean" inserted in its place. The word " includes " is so vague that no one knows what is included. Why not make the sub-section definite? Even if the words " shall mean " are substituted for " includes " the sub-section will still be wide in its application, for it deals with shares'held by or on behalf of various persons, or an expression of similar import. It might as well provide for shares held in any way. The language should be definite, so that the persons concerned might know what powers are vested in the Commissioner. After a company has been operating for a number of years, it should not be possible for the Commissioner to come along and say that it was formed for the purpose ofevading taxation. The term " or any expression of similar import " implies that Parliament leaves to the discretion of the Commissioner matters which should be definitely set out in legislation.







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