Franking credit is a withholding tax on profit earned by company on behalf of shareholders. Final tax bill will be calculated and adjusted upon shareholder doing their tax return at the year end.
Call to abolish franking credit is like, take a salary earner as an example, to ask the taxman to take away the tax withholding on salary earned already deducted during the year, then ask the salary earner to pay tax again on remaining income at tax return time.
This double taxation anomaly was corrected by Hawke & Paul Keating in 1987.
ADH Price at posting:
$3.62 Sentiment: Hold Disclosure: Held
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