13 -
VEDUURSDAY, JANUARY 22, 1975
MR. LEE REVIEWED IN GREAT DETAIL THE OLD AND NEW SYSTEMS, POINTING OUT THE WEAKNESSES OF THE FORMER AND THE MERITS OF THE LATTER. HE STRESSED THAT THE NEW SYSTEM WOULD NOT WORK TO THE DISADVANTAGE OF THE TAXPAYER BECAUSE THE AMOUNT OF PROVISIONAL TAX WILL STILL RELATE TO THE PRECEDING YEAR'S PROFIT WITH ADJUSTMENTS FOR EXCESS OR SMALL SHORTFALL TO DE MADE IN THE FOLLOWING ASSESSMENT AND THE TIME OF PAYMENT WILL STILL BE THE SAME AS UNDER THE EXISTING SYSTEM.
+ IT DOES NOT SEEK TO IMPOSE ANY ADDITIONAL BURDEN ON THE TAXPAYERS OR TO REQUIRE THEM TO PAY IN ADVANCE.
THE TIMING OF THE BILL, IN THE PRESENT SLACKENED ECONOMY, SHOULD ALSO HAVE NO EFFECT ON THE TAXPAYER BECAUSE, ACCEPTING THAT 1973/74 WAS GENERALLY A DETTER YEAR THAN 1974/75 AND THAT TAX ON THE 1973/74 PROFITS HAS TO DE PAID ANY WAY AT PRESENT BY JANUARY THIS YEAR, THE FIRST PAYMENT OF PROVISIONAL TAX WILL DE IN JANUARY 1976 AND ON THE SMALLER PROFIT.
*PROVIDED THAT EACH DUSINESS MAKES PROVISION FOR TAX BASED ON THE ACTUAL PROFIT EARNED, AND SETS ASIDE FUNDS AS ANY PRUDENT MANAGER WILL DO. NO HANDSHIP SHOULD EVER EXIST IN MEETING THE TAX PAYMENTS, HE SAID.
THE HON. J.H. BREMRIDGE ALSO SPOKE IN SUPPORT OF THE BILL WHICH, HE SAID, SERVED THE BALANCED INTERESTS OF THE COMMUNITY AS A WHOLE.
HIS REASON FOR SUPPORTING THE LEGISLATION WAS THAT THE GOVERNMENT BADLY NEEDED THE MONEY AND +1 CANNOT ACCEPT IN ALL FAIRNESS THAT COMPANY AND INDIVIDUAL TAXATION SHOULD NOT DE PLACED ON THE SAME FOOTING.❖
HOWEVER, HE NOTED THAT HE DID NOT FIND ALL THE PROVISIONS OF THE BILL ATTRACTIVE. IN PARTICULAR, HE WAS DISAPPOINTED BY THE FACT THAT THE UNOFFICIALS VERE UNABLE TO PERSUADE THE GOVERNMENT TO CHANGE FURTHER ITS APPROACH TO THE TRANSITIONAL ARRANGEMENT FOR INITIAL ALLOWANCES.
MA. BREMRIDGE SAID THE EFFECT OF THE LEGISLATION WAS THAT IN ONE OF THE TWO FINANCIAL YEARS 1973/74 OR 1974/75, INITIAL ALLOWANCES WILL NOT DE GRANTED AGAINST CAPITAL EXPENDITURE.
FOR INSTANCE, IF CAPITAL EXPENDITURE OF $10 MILLION DID NOT ATTRACT INITIAL ALLOWANCES FOR YEAR 1974/75, THE EFFECT WOULD BE THAT A COMPANY'S CASH FLOW IN THAT YEAR WOULD COME DOWN BY $544,000.
*THIS WILL IN THEORY REPRESENT NO TAX INGREASE BECAUSE THE MONEY WILL DE RECOVERED BY GREATER ANNUAL ALLOWANCES IN SUBSEQUENT YEARS. I SAY IN THEORY BECAUSE IN PRACTICE THIS IS NOT THE CASE. WITH A SIMPLE APPROACH IT WILL TAKE UNTIL 1991 TO RECOVER. WITH A DISCOUNT OF 20 PER CENT TO ALLOW FOR THE PRICE OF MONEY AND ITS CERTAIN DEPRECIATION, IT WILL NEVER COME BACK IN FULL.✨
MR. BREMRIDGE