Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)1
General outline and financial impact
1.1 Amends the Income Tax Rates Act 1986 to impose a rate of tax on the RSA business of friendly societies and other registered organizations.
1.2 Date of effect: The date that is the transfer date for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No 1) 1999 (Clause 2).
1.3 Proposal announced: Not previously announced.
1.4 Financial impact: Negligible.
1.5 Compliance cost impact: No additional compliance costs.
Background to the legislation
1.6 As part of the Financial Sector Reform, it is proposed to allow friendly societies to operate retirement savings accounts (RSAs). The Financial Sector Reform (Amendments and Transitional Provisions) Bill 1999 proposes to amend the Income Tax Assessment Act 1936 (the Tax Act) to recognise the RSA business of friendly societies and other registered organizations.
1.7 This Bill amends the Income Tax Rates Act 1986 (the Rates Act) to specify the rates of tax that apply to the RSA business of registered organizations.
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