The Federal Commissioner of Taxation has submitted the following memorandum for my advice:

Section 4 of the War-time Profits Tax Assessment Act defines 'taxpayer' as any person chargeable with war-time profits tax.

Section 10 (2) provides that war-time profits tax payable on the profits derived by a business carried on by partners shall be payable by the partnership, but for purposes of this section, the tax shall be deemed to have been paid by each partner in proportion to his interest in the profits.

Section 45 of the same Act deals with contributions of tax from joint taxpayers severally liable for the whole of the tax.

Section 59 of the same Act authorises a Board to release a taxpayer from payment of tax in certain instances.

The question for decision is whether a member of a partnership is a taxpayer who is entitled to make an individual application under section 59 of the Act for release from tax recoverable from him or for release from the amount of tax which he is liable to contribute.

I should be glad to have your opinion as to the law on this point, and if you could treat the matter as one of special urgency I should be further obliged, as it will assist me to determine a number of cases at present under reference to me in connection with applications for relief from tax.

Section 4 of the War-time Profits Tax Assessment Act 1917-1918 defines taxpayer as 'any person chargeable with war-time profits tax'.

On the general construction of the Act I am of opinion that, although in the case of a business carried on by partners the war-time profits tax is primarily payable by the partnership, yet in fact each of the partners in the business is a person liable to pay war-time profits tax. The provisions of section 45 of the Act would seem to confirm this view, as that section expressly provides that where two or more persons are jointly liable to war-time profits tax, they shall each be liable for the whole tax.

The power of release vested in the Board by section 59 of the Act is expressed to apply-'In any case where a taxpayer liable to pay war-time profits tax has become bankrupt or insolvent, or has suffered such a loss that the exaction of the full amount of tax will entail serious hardship . . . '

In my opinion a member of a partnership is a person liable to pay war-time profits tax and he is, therefore, a taxpayer entitled to claim the benefits of section 59 of the Act.

[Vol. 18, p. 307]