Explanatory Memorandum(Circulated by the Treasurer, the Hon. B.M. Snedden, Q.C., M.P.)
The purpose of this memorandum is to explain the provisions of two income tax Bills.
The first Bill - the Income Tax Bill 1971 - will declare the rates of income tax payable by individuals and companies for the current financial year 1971-72. The main features of the Bill involving a change in the practical effect of the law are:-
- Rates of tax, individuals (clauses 6 to 8). While proposed rates of tax payable by individuals under clauses 6 and 7 for the 1971-72 financial year are to be the same as those that applied for the preceding year the additional tax imposed under clause 8 for the 1971-72 financial year is to be 5 per cent of the income tax otherwise payable. For the 1970-71 financial year, the comparable rate of additional tax was 2 1/2 per cent.
- Rates of tax, companies (clause 10). The rates of tax payable for the 1971-72 financial year by companies (other than friendly society dispensaries) on the first $10,000 of taxable income of the 1970-71 income year are to be increased by 5 cents in the dollar.
- Superannuation funds (clause 6(5.)). The rate of tax payable by a trustee of a superannuation fund in respect of the first $10,000 of its 1971-72 investment income where the fund does not invest a sufficient proportion of its assets in public securities is being increased by 5 cents in the dollar.
The second Bill - the Income Tax Assessment Bill (No. 3) 1971 - will give effect to proposals announced in the Budget Speech to liberalise personal income tax deductions in connexion with the maintenance and education of students and to authorise a deduction for certain expenditure incurred by taxpayers in adopting children.
Exemptions equivalent to those granted in pursuance of the agreements covering other Australian/United States projects in Australia are to be granted by the Bill in order to give effect to an agreement with the United States in relation to the Joint Defence Space Communications Station at Woomera.
In addition, the Bill will make provision for gifts of $2 and upwards to the Productivity Promotion Council of Australia to be allowable deductions from assessable income and will discontinue the existing provision for gifts to the Australian Productivity Council.