This also maintains the effect of existing law. I have circulated an example of how it operates.
SECTION 58.
Question proposed: " That section 58 stand part of the Bill."
What is Government loan interest?
Interest on national loans.
Could the Minister tell us briefly what the effect of the section is?
It sets out the rules for the computation for corporation tax purposes or export sales relief. The example explains how it operates.
Is it only the excess of export sales in the particular year over the export sales in what is called the standard period of the previous section, which appears to be 1955 or 1956?
It is the excess over any exports which it had in the earlier period. That is what qualifies for the relief in relation to a company which was in existence prior to the date in question. Any new company, of course, which was engaged in exports would get it over its whole exports but when you have regard to the fact that, apart from the volume of sales, the value of sales is increasing anyway and export sales relief applies to an increasing proportion of export sales.
Are these new companies that have come into the export market.
No. Subsections (1) and (2) are dealing with what we might call old companies and for them the relief applies too. If there were a re-export field originally, then only to the excess over their previous exports. It is the excess in value that enjoys the relief, so it becomes a more significant relief for such companies as the years go on.
Value, not in volume.
Value.
And the 1976 value is set against the 1955-56 value, so that even if there was not an increase in volume there could still be relief because the values are now higher?
Yes.
That is the only good bit I saw coming out of inflation in a long time. Clearly this section is not just a reproduction of the section in the Income Tax Act, because the section is referred to here in subsection (6).
Of course, there has to be a change in wording but it reproduces the effect of existing law.
The Minister will appreciate that as far as most of us here are concerned—I speak for myself anyway—we are entirely in his hands when he makes a statement like that.
I appreciate that, so I do not make the statement lightly, and in so far as we can we have already given an undertaking to the Committee which we are only too happy to discharge, to guide the Committee on the effect of different sections, and if any significant change takes place, we will alert the Committee to it.
Question put and agreed to.