CO129-615-2 Income tax 10-3-1947 - 6-2-1948 — Page 262

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Subsection (2) of this Section appears to be a proviso to subsection (1), rather than a separate subsection and we therefore propose that the numbering of the subsections be deleted and the words "notwithstanding anything in the foregoing subsection" be replaced by the words "provide? that".

Section 23 (3): We suggest that the time liinit of twelve months during which the election provided for in this Section may be made should be extended to two years in the case of changes which took place during the year ending 31st March, 1947.

The word "may" after "Assessor" in the fourth line from the endof this subsection we consider should read "shall".

Section 28: In pursuance of the principle of not taxing profits and earnings retrospectively it is not necessary to require that companies should deduct tax from dividends paid in respect of any period prior to the coming into force of the Ordinance, and the following proviso should be added to Section 28:-

Provided that this Section shall not apply to any dividend declared in respect of any period ending prior to 1st April, 1947.

CHAPTER V INTEREST TAX

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17. In accordance with the principle of not taxing income retrospectively the word "accruing" should be substituted for the Words falling due" where they appear in this Chapter.

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CHAPTER VI - DEPRECIATION, ETC.

Section 36: There is an omission here. As drafted, a balancing charge could be made on a capital profit, and the following subsection (4) should be inserted:-

Notwithstanding anything in the last preceding sub- section in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts, that is to say -

(a) the amount of the initial allowance, if any, made to him in respect of the expenditure in question;

(b) the amount of the annual allowances, if any, made to him in respect of the expenditure in question.

Section 37 (3); The second paragraph and the proviso of subsection (3) are adapted from the United Kingdom Income Tax Act, 1945, but we consider that they are too elaborate for local requirements and should be replaced by the following:-

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or the purpose of computing the residue of crpendi ture there shall be written off an amount of one-fiftieth of the expenditure in respect of any year of assessment in which no initial or annual allowance falls to be made.

Chapin C

Section 42: As doubts have arisen as to the preciso meaning of this section as drafted, we suggest the following simpler form:-