Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)FINANCIAL IMPACT
Taxation Laws Amendment Bill (No.3) 1986
The amendments being made to provide income tax deductibility in respect of cash bids for off-shore petroleum exploration permits should have no effect on revenue until the 1988-89 year. The estimated cost to revenue in that year is $1m, increasing to $1.5m in each subsequent year.
The amendments relating to profit on death or destruction of certain live stock are not expected to have any significant effect on revenue.
The amendments being made to the interest withholding tax provisions of the income tax law are estimated to yield a net $10m in the 1986-87 income year. The revenue gain is expected to increase in future years, dependent on the extent to which the States and Government authorities have resort to public or other widely-spread issues of securities overseas the interest on which is exempt from withholding tax under the amendments proposed to section 128F.
The estimated revenue gain from taking service fees into account in the trading stock valuation of horses acquired by natural increase is $7m in 1988-89, with negligible gains in subsequent years.
The amendments relating to the special valuation option in respect of breeding horses and to the prescribed minimum cost price of natural increase of certain classes of live stock should have no significant effect on revenue.
The reinstatement of full tax exemption of the pay and allowances for part time service by members of the Defence Force Reserves and Emergency Reserves is estimated to cost $5 million in 1986-87 and $12 million in a full year.
The revenue cost of extending the income tax gift provisions to admit the Australian Academy of Technological Sciences and the Australian College of Occupational Medicine is estimated at nil for 1986-87 and less than $60,000 for subsequent years.
The amendments relating to the burden of proof provisions, the addition of the Secretary to the Department of Science as an authority to approve an approved research institute and the deletion of redundant provisions from the Administrative Decisions (Judicial Review) Act will have no effect on revenue.
Neither the protocol with the Netherlands nor the comprehensive taxation agreement with Austria is expected to have any significant effect on revenue.
Bank Account Debits Tax Amendment Bill 1986
The additional revenue from the increase in the general rates of bank account debits tax is estimated at $45m in 1986-87 and $90m in a full year.
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