House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

General outline and financial impact

Overview

This Bill contains a number of technical amendments to improve the Government's ability to address excise evasion through fuel substitution activities.

The amendments:

•

replace references in the legislation to specific excise tariff items with generic descriptions. This will allow the Government to quickly amend the excise tariff in accordance with the special provisions of the Excise Act 1901 that allow the tariff to be changed by simply gazetting or tabling a new tariff proposal;

•

change the Fuel (Penalty Surcharges) Administration Act 1997 to facilitate prosecutions for fuel substitution offences by removing technical difficulties with the definition of 'fuel' and allowing the use of evidentiary certificates in prosecutions; and

•

change the Fuel (Penalty Surcharges) Administration Act 1997 to cover a broader range of imported products that can be used in fuel substitution activities (e.g. chemical grade toluene) and require persons dealing in these products to meet the record keeping provisions of the Act.

Date of effect : The measures will commence on the date of Royal Assent.

Proposal announced : The Government foreshadowed a review of the arrangements relating to fuel substitution activities in the policy document entitled Tax Reform: not a new tax: a new tax system .

Financial impact : Negligible.

Compliance cost impact : Compliance costs will remain the same.