House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. John Howard, M.P.)

Introductory Note

The purpose of this memorandum is to explain the provisions of the above Bills.

The principal Bill is the Taxation Administration Amendment Bill, which is a Bill to amend the Taxation Administration Act in order to abolish the Valuation Boards. The five remaining Bills will amend the provisions of several taxation Acts relating to the jurisdiction of the Valuation Boards and a particular statutory function of the Chairman of the Valuation Boards.

The Valuation Boards are established under the Taxation Administration Act 1953, their primary function being the determination of disputed valuations made by the Commissioner of Taxation for purposes of assessments raised under the Estate Duty Assessment Act and the Gift Duty Assessment Act. The abolition of estate duty and gift duty on and from 1 July 1979 will remove the primary need for the Valuation Boards. The Estate Duty Assessment Amendment Bill and the Gift Duty Assessment Amendment Bill provide for the residual function of Valuation Boards in determining questions relating to valuation of property arising under estate duty and gift duty assessments to be taken over by the Taxation Boards of Review.

The Chairman of the Valuation Boards has an additional function under the Income Tax Assessment Act, the Estate Duty Assessment Act, the Pay-roll Tax Assessment Act and the Pay-roll Tax (Territories) Assessment Act. This concerns applications by taxpayers, beneficiaries or administrators of deceased estates or employers, as the case may be, for total or partial release from tax liabilities where serious financial hardship would be involved by exaction of the full amount of tax or duty due. A Relief Board exists to determine whether this release should be given.

Broadly stated, the Chairman's responsibility is to submit reports to the relevant Relief Board upon the facts as determined by examination of persons whose applications for release have been referred to him by that Board. His examination is to establish the financial position of the taxpayer, beneficiary or employer. He does not make any recommendation or decision regarding ability to pay, this matter being left to the Relief Board.

The Estate Duty Assessment Amendment Bill, the Income Tax Assessment Amendment Bill (No. 3), the Pay-roll Tax Assessment Amendment Bill and the Pay-roll Tax (Territories) Assessment Amendment Bill (No. 2) provide for this function to be transferred to the Boards of Review to be dealt with as the Chairman of the Board of Review concerned decides, by either the Chairman, another member of the Board or the Secretary to the Board. There is no provision in the Gift Duty Assessment Act for release from gift duty in the case of financial hardship.

The amendments proposed by the above Bills are, in the main, formal amendments to delete references to Valuation Boards and insert appropriate references to Taxation Boards of Review. Other minor drafting amendments have in some cases been made to bring into line the relief provisions in each Act being amended.

The Estate Duty Assessment Amendment Bill and the Gift Duty Assessment Amendment Bill also contain transitional provisions designed to ensure that any outstanding requests for reference to a Valuation Board will be capable of being referred, upon request, to a Board of Review or to a specified Supreme Court. This will protect the legal rights of persons who may have requested that a decision on an objection relating to the value of property be referred to a Valuation Board for review where that request is still being dealt with by the Commissioner.

Notes on the clauses of each Bill are set out below.

TAXATION ADMINISTRATION AMENDMENT BILL 1979

ESTATE DUTY ASSESSMENT AMENDMENT BILL 1979

GIFT DUTY ASSESSMENT AMENDMENT BILL 1979

INCOME TAX ASSESSMENT AMENDMENT BILL (No. 3) 1979

PAY-ROLL TAX ASSESSMENT AMENDMENT BILL 1979

PAY-ROLL TAX (TERRITORIES) ASSESSMENT AMENDMENT BILL (No. 2) 1979