3.2.87
Profits Tax
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128.
As to profits tax, I propose a reduction in
the rate of tax on corporate profits from 18 1/2% to 18%. The cost of the reduction proposed is $135 million in
28 and, for a full year, $310 million. The new
corporate rate of 18% will apply to provisional and final
assessments for 1987-88.
129.
I am aware that some have argued for a more
substantial cut in the rate of corporate profits tax on
the ground that this would provide a stimulus to the
business sector. I do not consider that we should move
too sharply at this stage. But I hope that this clear
indication of the direction in which I would like to move
will provide, if not a stimulus to the corporate sector,
then at least sound reason for confidence that we remain
determined to maintain a low tax regime in which business
can flourish. Gentle progress will serve us best.
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