Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)FINANCIAL IMPACT
Receipts from registration fees and the triennial re-registration fees that are to apply to tax agents are expected to be $1.3 million in 1988-89, and $170,000 in each of the years 1989-90 and 1990-91. Similar patterns of receipts will occur in each subsequent 3 year period. These fees, however, will generally be tax deductible and the net gains to revenue are estimated to be $750,000 in 1988-89 and $100,000 in each of the subsequent two years.
The amendment of the special depreciation concession for Australian trading ships is estimated to produce revenue savings of $2m in 1987-88, $3m in 1988-89, $19m in 1989-90 and a full year saving of $35m in subsequent years.
The amendments being made to extend income tax deductibility to cash bids for offshore petroleum exploration permits or production licences should have no effect on revenue over the next three years. Future revenue effects cannot be estimated due to uncertainty as to when production licences might be granted under cash bidding arrangements.
The amendments of the Income Tax Assessment Act 1936 and the Taxation Laws Amendment (Foreign Tax Credits) Act 1986 to modify the practical application of the foreign tax credit system will have negligible effect on revenue in 1987-88 but may produce some unquantifiable revenue savings in subsequent years of income.
The amendments to Division 16F, which relate to the thin capitalisation rules for foreign investments, will have a negligible impact on revenue.
The effect on revenue of taxing Aboriginal Study Assistance Scheme and certain Aboriginal Secondary Assistance Scheme payments will be negligible in 1987-88, with a gain to revenue of $0.5 million in subsequent years.
Extending the availability of the income tax beneficiary rebates to Formal Training Allowance recipients is expected to cost $2.5 million in 1988-89.
Excluding family allowance supplement and child disability allowance from "separate net income" for the purposes of the income tax rebates for dependants will have negligible effect on revenue.
The revenue gain from taxing the carer's pension where the person cared for is of age pension age and the non-relative carer is not is also expected to be negligible.
The following amendments will have no effect on revenue:
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- the technical amendment of the income tax exemption provisions following the transfer to the Disability Services Act 1986 of authority for the payment of certain allowances to disabled persons;
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- the amendments relating to the omission of redundant paragraphs 23(x) and (y) of the Income Tax Assessment Act 1936;
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- the amendments of the Income Tax Assessment Act 1936 and the Income Tax Rates Act 1986 consequent upon the renumbering of the Social Security Act 1947;
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- the amendment of the Taxation Laws Amendment (Fringe Benefits and Substantiation) Act 1987;
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- the removal of redundant sales tax exemption items.