Objects and Reasons.
1. This Bill is based generally on a Bill recommended by the Reconstituted War Revenue Committee in the appendix to their Report which was laid on the Table of the Legislative Council on the 29th April, 1941.
2. The Committee's recommendations involved firstly, a revision of the various clauses of the War Revenue Ordinances of the previous year (Ordinances Nos. 13, 21 and 29 of 1940) with a view to adjusting what appeared to the Committee to be the principal inequities in those Ordinances; secondly, an increase in the allowances made to those paying salaries tax; thirdly, a different basis for the assessment of the tax on profits made by those carrying on a trade, profession or business, with a view to increasing the yield on this tax, which had proved disappointing on the previous basis; fourthly, a new tax (see Chapter V of the Bill) on certain classes of readily ascertainable interest arising in or accruing in the Colony on debentures, mortgages, bills of sale and business loans; fifthly, raising the original taxation rates of five (in one case four) and ten per cent. to six and twelve per cent. respectively; and sixthly, substituting a single amended and consolidated Ordinance for the existing War Revenue Ordinances.
3. The Government has accepted these recommendations generally; but considers that the rates of tax should be further increased from six and twelve per cent. to seven and fourteen per cent. respectively (see clauses 5, 14, 15, 16, 30 and 31 of the Bill).
4. As this increase, which the Government considers amply justified in view of War Revenue requirements and of the effort the Colony must make to meet them, may bear unduly hardly on persons paying salaries tax, who were last year required to pay on the first five thousand dollars at four per cent. Government has decided that payment of salaries tax on the first five thousand dollars should not be increased beyond the six per cent. recommended by the Committee.
5. Government has however decided also that the exemp- tion limit of $4,800 a year was too high and has recommended its reduction to $3,600 (see Clauses 8 (iii) and 14 (2) of the Bill).
6. A commentary on each clause of the Bill which differs in any way from a corresponding clause in the War Revenue Legislation of 1940 is attached in the form of a Table of Correspondence.
June, 1941.
C. G. ALABASTER,
Attorney General.
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