Startling Taxation

Demands

High Court Cases Affect P-NG

NEXT month, in the Australian High Court,, the Australian Taxation Department will try to compel several companies, firms and individuals who made large profits out of post-war enterprises in Papua- N. Guinea to pay taxation. The case of Milne Bay Merchants, Ltd., registered in Moresby (Mr. A. M.

Westhoven, managing director) is typical.

A group which included Messrs.

John Stubbs, Hornibrook and Lonergan bought Papuan salvage rights from Disposals and sold them to Vacuum Oil Co. at a very much larger figure. The oil company salvaged its thousands of precious drums and oil installation equipment, and sold the rest to Mr. Westhoven.

The latter formed Milne Bay Merchants, Ltd., and that company gathered huge quantities of scrap in Eastern Papua, and made large profits.

Mr. Westhoven settled in Moresby and lived there for two years. He was assured he was clear of income tax.

Others did the same. Australian newspapers have just told how Mr.

Reg. Eginton, now on his way with his wife to Europe, made £150,000 out of Papuan scrap.

Early 1951, Australian Taxation pounced. For many months, swarms of officials have been interesting themselves in the profits made by allegedly Australian interests in post-war activities in the Islands.

The latter claimed they had Terri tories domicile and could not be taxed. Taxation men challenge on

domicile, and insist that most of them really have Australian domicile.

Milne Bay Merchants, Ltd., have been double-taxed and fined, and asked to pay £75,000.

This case, and many similar, will go before the High Court in May.

The Taxation claims have aroused intense interest. It is held that, of certain of them are allowed, a large proportion of the Panua-N. Guinea will become subject to Australian income taxation.