Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)FINANCIAL IMPACT
Taxation Laws Amendment Bill (No. 5) 1986
The payment of provisional tax by instalments will have no on-going effect on revenue. It is estimated, however, that provisional tax collections of $90 million will be brought forward to 1987-88. Depending on interest rate assumptions, it is also estimated that annual expenditure savings of up to $100 million will result from the need to issue fewer Treasury notes. Actual expenditure savings will vary from year to year depending on the level of interest rates and the size of provisional tax payments. Additional administrative costs for the Taxation Office are estimated to be $1 million in 1986-87, $7 million in 1987-88 and $5.4 million in 1988-89 and subsequent years.
The nature of the measures relating to foreign currency exchange gains and losses is such that a reliable estimate of the potential revenue saving or cost cannot be made.
The revenue saving from the adoption of the measures dealing with short-term financing arrangements by the use of redeemable preference and other shares is indeterminate.
The estimated cost of exempting the income of The British Phosphate Commissioners Banaba Contingency Fund is $50,000 in a full year.