Explanatory Memorandum
(Circulated by the authority of the Minister for Industry, Science and Technology, Senator the Hon Peter Cook)OUTLINE
This Bill together with the Departure Tax Amendment Bill 1994 implements the Government's decision announced in the 1994 Budget to replace the existing departure tax with a $27 passenger movement charge to fully offset the cost of customs, immigration and quarantine (CIQ) processing at Australia's borders and the cost of issuing short-term visitor visas.
The cost recovery initiative is proposed to be achieved by utilising the existing legislative mechanism for departure tax to both levy and collect the passenger movement charge. Most of the amendments effected by the two bills therefore simply substitute the current references to "tax" in each of the Principal Acts with "charge".
The Departure Tax Amendment Bill 1994 imposes the charge while the Departure Tax Collection Amendment Bill 1994 provides the mechanism for collecting the charge.
The replacement of the existing $25 departure tax with the $27 passenger movement charge will result in the following increases to revenue:
| 1994-95 | $5m |
| 1995-96 | $12m |
| 1996-97 | $13m |
| 1997-98 | $13m |
DEPARTURE TAX COLLECTION AMENDMENT BILL 1994
NOTES ON CLAUSES
1. This is a machinery clause which provides for the citation of the Act and identifies the Departure Tax Collection Act 1978 as the Principal Act being amended.
2. This clause provides for the Act to commence on the day on which it receives the Royal Assent.
3. This clause outlines the object of the Act as changing the name of the departure tax to the passenger movement charge and increasing the rate of the charge from $25 to $27. This reflects the fact that the scheme is moving from one of imposing departure tax as a general revenue measure to levying a charge which represents the cost of providing customs, immigration and quarantine services and short-term visitor visa processing.
Clause 4 - Amendment of long title
4. This clause substitutes the word "charge" for "taxation" in the long title of the Principal Act to emphasise the fact that while the existing departure tax mechanism is being utilised for the imposition and collection of the levy, the levy itself is a cost recovery measure rather than a revenue measure.
5. This clause amends the Short Title of the Principal Act by substituting "Passenger Movement Charge" for "Departure Tax" for the reasons outlined above in relation to clause 4.
6. This clause effects consequential changes to various definitions in the Principal Act to replace any references to "tax" with "charge". The clause also inserts two new definitions as follows:
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- 'charge' is defined as the charge, called the 'passenger movement charge' imposed by the Passenger Movement Charge Act 1978.
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- 'charge stamp' is defined as a charge stamp issued under this Act and replaces the concept of a "tax stamp".
Clause 7 - Persons exempt from passenger movement charge
7. This clause replaces "Tax" with "Charge" in section 5 of the Principal Act but maintains the same exemptions from the charge as currently exist in relation to departure tax, including persons under 12 years of age, crew, and personnel covered by Status of Forces Agreements between Australia and the relevant country.
Clause 8 - Liability to pay passenger movement charge
8. This clause amends section 6 of the Principal Act (liability to pay tax) by substituting "charge" for "tax" and substituting "1 penalty unit" for "$100". The latter amendment is intended to update the penalty to reflect recent amendments to the Crimes Act in respect of penalties generally.
Clause 9 - Powers of authorised officers
9. This clause amends section 7 of the Principal Act (powers of authorised officers) to substitute "charge" for "tax" in paragraph (1)(b) and subsection (2).
10. This clause substitutes the dollar penalties in each case with penalty units, for the reasons set out above in relation to clause 8.
Clause 11 - Refunds of passenger movement charge
11. This clause amends section 9 of the Principal Act (refunds of tax) by substituting "charge" for "tax" and substituting "5 penalty units" for "500".
Clause 12 - Special arrangements for payment of passenger movement charge
12. This clause amends section 10 of the Principal Act (special arrangements for payment of tax) to substitute "charge" for "tax".
Clause 13 - Charge stamps and exemption stamps
13. This clause amends section 11 of the Principal Act (tax stamps and exemption stamps) to substitute "charge" for "tax".
Clause 14 - Recovery of passenger movement charge
14. This clause amends section 12 of the Principal Act (recovery of tax) to substitute "charge" for "tax".
15. This clause amends section 13 of the Principal Act (averment) to substitute "charge" for "tax".
16. This clause substitutes "5 penalty units" for "$500" in section 15 of the Principal Act for the same reasons as outlined above in relation to clause 8.
Clause 17 - Consequential amendment of Fringe Benefits Tax Assessment Act 1986
17. This clause amends the Fringe Benefits Tax Assessment Act 1986 as set out in the Schedule, to include references to the passenger movement charge.
Clause 18 - Application of amendments
18. As with clause 9 of the Departure Tax Amendment Bill 1994, this clause provides that the new cost recovery arrangements reflected in the passenger movement charge will come into effect in respect of departures from Australia that occur on or after 1 January 1995 (subclause (1)).
19. The clause also ensures that where departure tax has been paid under the present arrangements and a person is eligible for refund of that tax, then the Principal Act continues to apply in relation to the refund despite the amendments made by this Act (subclause (2)).
Clause 19 - Transitional arrangements
20. This clause ensures that any payment arrangement made before 1 January 1995 that would have applied to departure tax in relation to persons departing from Australia on or after 1 January 1995, without the amendments effected by this Act, applies instead to the passenger movement charge payable in respect of such departures.
Clause 20 - Transitional - tax stamps
21. This clause provides that on or after 1 January 1995 the regulations apply to a tax stamp as if it were a charge stamp where it has been issued, or supplied to an approved agent, before 1 January 1995 but has not been produced for the purpose of payment of tax in relation to a departure from Australia occurring before that date.
SCHEDULE
22. The Schedule details the amendments to the Fringe Benefits Tax Assessment Act 1986 effected by clause 17. In each case the amendment inserts "passenger movement charge" to ensure that the fringe benefits tax regime extends equally to payment of the passenger movement charge.