Explanatory Memorandum
(Circulated by authority of the Acting Treasurer, the Hon. Chris Hurford, M.P.)FINANCIAL IMPACT
Taxation Laws Amendment Bill 1986
The estimated revenue gain from limiting deductions for interest on rental investment borrowings is $55m in 1986- 87, $100m in 1987-88, rising to $195m in 1990-91 and subsequent years.
The estimated cost of allowing depreciation deductions for certain residential income-producing buildings commenced to be constructed after 17 July 1985 is $2m in 1986-87 and $7m in 1987-88.
It is not possible to quantify the potential revenue saving from the proposed measures to tax consideration received for transferring rights to receive future income. However, following the decision of the Federal Court in FCT v Myer Emporium Ltd (85 ATC 4601), revenue losses running into many millions of dollars could have resulted if measures had not been announced to prevent tax avoidance by the assignment of long-term income flows.
The measures relating to the Commissioner's powers to make and amend assessments so as to facilitate the implementation of a system of self-assessment of income tax returns will have no direct effect on revenue.
The revenue cost of extending the income tax gift provisions to admit the Australian Sports Aid Foundation is estimated at up to $5m in a full financial year.
The airline profits agreement with the People's Republic of China is not expected to have any significant effect on revenue.
The potential saving to the revenue arising from the introduction of the pay-roll tax grouping provisions is estimated to be $7m in a full financial year.
Taxation (Interest on Underpayments) Bill 1986
The estimated net revenue gain from the payment of interest by taxpayers, after netting off interest payments by the Commissioner, is $2m.