Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
AMENDMENT OF THE SALES TAX LAW
Motor vehicles for use by governments
Amends the Sales Tax Assessment Act 1992 and the Sales Tax (Exemptions and Classifications) Act 1992 to remove the exemption from sales tax in respect of certain vehicles, and parts for those vehicles, purchased by governments or government authorities, where the vehicles are wholly or partly for private use as part of an employee's remuneration.
Date of effect: 3.15pm (AEST), 11 June 1996.
Proposal announced: Treasurer's Press Release No. 27 of 11 June 1996 as modified by Treasurer's Press Release No. 30 of 14 June 1996.
Financial impact: This measure is expected to raise between $50 million and $100 million in 1996-97.
Compliance cost impact: There will be some impact on the compliance costs of the affected government bodies. They will need to determine which of the vehicles they purchase after 3.15pm on 11 June 1996 will still be exempt and which will be subject to tax. Where vehicles will still be exempt, the government body can simply quote their exemption declaration to receive the vehicle tax-free as they currently do. Affected government bodies will also need to maintain a record of their exempt and taxed vehicles for the purpose of determining whether they can quote in respect of parts purchased for those vehicles.