Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello MP)Chapter 4 Repealing current inoperative Acts
Outline of chapter
4.1 Schedule 5 to this Bill repeals the tax law Acts that have been identified as inoperative. Schedule 5 also makes consequential amendments to various pieces of Commonwealth legislation required because those inoperative Acts are repealed.
Context of amendments
4.2 For reasons similar to those explained in Chapter 2, Acts (just like provisions of Acts) are inoperative when they no longer apply to taxpayers, either because they have no effect after a date in the past or because all the transactions or events they did affect have now concluded.
Example 4.1: Examples of inoperative Acts
The sales tax law became inoperative shortly after the introduction of the goods and services tax on 1 July 2000, as it generally ceased to apply to new transactions after that time.
Commonwealth payroll tax ceased to apply to wages paid after 1 September 1971, which is the date the Commonwealth transferred responsibility for payroll tax to the States. Shortly after that date the payroll tax Acts become inoperative as they had no future application to taxpayers.
4.3 The Bill repeals over 1,500 pages of inoperative Acts, resulting in a significant reduction in size of the Commonwealth statute book.
Summary of new law
4.4 The Acts listed in Part 1 of Schedule 5 to this Bill are repealed. In each case, the Act was analysed as having no operation for future years or as being so unlikely to have an operation for future years that it was inoperative in any practical sense.
Detailed explanation of new law
4.5 The Acts listed in Part 1 of Schedule 5 to this Bill are repealed on Royal Assent. [ Schedule 5, item 1 ]
Crimes (Taxation Offences) Act 1980
4.6 The Crimes (Taxation Offences) Act 1980 makes it an offence to enter into arrangements with the intention of avoiding the payment of tax debts.
4.7 The Crimes (Taxation Offences) Act 1980 applies to most Commonwealth taxes administered by the Commissioner of Taxation (Commissioner). It does that by setting up the model offences in relation to the pre-1992 sales tax law in one part and then, in separate parts, applying the sales tax part to each other tax as if, the words 'old sales tax' were replaced by 'income tax', 'fringe benefits tax' and so on.
4.8 In order to remove the references to the inoperative Acts from the application of the Crimes (Taxation Offences) Act 1980 , the model offence provisions are changed so that the base for the model is income tax instead of the pre-1992 sales tax law. As a result of changing the base in the model provisions, the rules applying that model to other taxes are also modified. [ Schedule 5, items 45 to 111 ]
4.9 The definition of 'Australian installation' in subsection 3(1) of the Crimes (Taxation Offences) Act 1980 is amended. Instead of deriving its meaning from the sales tax law, it now refers to an equivalent definition in the Customs Act 1901 . Despite some differences in expression, the meaning in the sales tax law is the same as that in the Customs Act 1901 . [ Schedule 5, item 45, subsection 3(1 ), ( definition of ' Australian installation' ), Crimes ( Taxation Offences ) Act 1980 ]
4.10 Despite the numerous amendments required to remove the redundant references, the Crimes (Taxation Offences) Act 1980 still operates to create the same offences as it did before the amendments.
Savings, application and transitional provisions
4.11 The commencement for the repeal and amendment of provisions under Schedule 5 to this Bill is the date of Royal Assent [ subclause 2(1 ), item 4 in the table ]. The repeals and consequential amendments apply to any states of affairs and acts done after commencement [ Schedule 6, item 5 ].
4.12 The savings provisions applying to the repeal of the inoperative Acts and the related consequential amendments are described in paragraphs 2.39 to 2.56.
Example 4.2: Continuing entitlement to sales tax credit
Funtime Gadgets Pty Ltd (Funtime) paid an amount of sales tax in 1999. A court decision in 2000, in relation to another company, suggested the amount was not legally payable. In 2001, Funtime repaid the overpayment to its customers and notified the Commissioner that it claimed a credit under section 51 of the Sales Tax Assessment Act 1992 for an amount of overpaid sales tax. In 2007, it still awaited the Commissioner's decision.
The Sales Tax Assessment Act 1992 is repealed by this Bill. Does Funtime's claim to a credit lapse?
No. The claim for a credit relates to an act occurring before the repeal (namely, the overpayment of sales tax), so is preserved by the saving provision at item 6 of Schedule 6.
Consequential amendments
4.13 Various amendments are made to a number of Commonwealth Acts to remove references to provisions of redundant Acts and their related concepts. [ Schedule 5, items 2 to 179 ]