House of Representatives

Explanatory Memorandum

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

Chapter 3 - Amendment of the Crimes (Taxation Offences) Act 1980

Outline of chapter

3.1 Schedule 4 to this bill amends the Crimes (Taxation Offences) Act 1980 to correct the deeming provisions and to harmonise the offence provisions with the Criminal Code.

Context of amendments

3.2 The Criminal Code provides a uniform interpretation for offence provisions in all Commonwealth legislation. It commenced to apply to newly enacted offences from 1 January 1997 and to all Commonwealth offences from 15 December 2001.

3.3 All Commonwealth offence provisions were required to be reviewed and amended if necessary, to ensure that the operation of the Criminal Code would not alter the existing interpretation of the offences.

3.4 While legislation in the Treasury portfolio was harmonised in 2001, amendments to the Crimes (Taxation Offences) Act 1980 were inadvertently omitted from this project. Amendments necessary to harmonise the Crimes (Taxation Offences) Act 1980 with the Criminal Code are contained in Part 2 of Schedule 4 to this bill.

3.5 In addition, Part 1 of Schedule 4 to this bill makes amendments to the deeming provisions contained in the Crimes (Taxation Offences) Act 1980. Part II of the Crimes (Taxation Offences) Act 1980 sets out offences in relation to 'old sales tax', and the deeming provisions in Parts III to X then purport to apply these offences to other taxes and charges (such as income tax, FBT, superannuation guarantee charge and GST). When the sales tax laws were streamlined in 1992, the references in Part II were changed from 'sales tax' to 'old sales tax'. However, the consequential amendments to the deeming provisions in Parts III to X were overlooked, and they still refer to 'sales tax', rather than to 'old sales tax'.

3.6 It is possible that a court would be able to correctly interpret the Crimes (Taxation Offences) Act 1980 to apply the offences in Part II to other taxes and charges. However, to put the interpretation beyond doubt, amendments are being made to correct the references to 'sales tax' in the deeming provisions, replacing them with 'old sales tax'.

Detailed explanation of new law

Amendments to deeming provisions

3.7 This bill amends the Crimes (Taxation Offences) Act 1980 to ensure that the offences apply as intended.

3.8 The offences in Part II of the Crimes (Taxation Offences) Act 1980 enable the prosecution of persons who enter into arrangements to avoid, or aid and abet persons to avoid, payment of old sales tax. Parts III to X apply these same offences to income tax, FBT, petroleum resource rent tax, training guarantee charge, superannuation guarantee charge, GST, WET and LCT.

3.9 This bill amends the deeming provisions in Parts III to X of the Crimes (Taxation Offences) Act 1980, amending references to 'sales tax' to read 'old sales tax'. This ensures that the correct terminology is used when these Parts refer to Part II. This is necessary because Part II no longer uses the phrase 'sales tax' but 'old sales tax'. For the same reason references in Parts III to X to 'future sales tax' and 'sales tax moneys' are amended to refer to 'future old sales tax' and 'old sales tax moneys' respectively. [Schedule 4, item 2, paragraphs 13(1)(a), (b) and (d); item 3, paragraphs 14(1)(a), (b) and (d); item 4, paragraphs 15(1)(a), (b) and (d); item 5, paragraphs 16(1)(a), (b) and (d); item 6, paragraphs 17(1)(a), (b) and (d); item 7, paragraphs 18(1)(a), (b) and (d); item 8, paragraphs 19(1)(a), (b) and (d); item 9, paragraphs 20(1)(a), (b) and (d)]

3.10 This bill also amends references to 'sales tax' in the interpretation section of the Crimes (Taxation Offences) Act 1980 to read 'old sales tax'. Again, this ensures that the correct terminology is used, for the purpose of making reference to this section. [Schedule 4, item 1, paragraph 3(2)(a)]

Criminal Code harmonisation amendments

3.11 The Treasury Legislation Amendment (Application of the Criminal Code) Act (No. 2) 2001 contained amendments to offences in taxation legislation within the Treasury portfolio, to ensure the offences would continue to be interpreted in the same way after the Criminal Code was applied to them from 15 December 2001. However, when these amendments were made, amendments to the Crimes (Taxation Offences) Act 1980 were inadvertently left out.

3.12 Therefore, this bill amends the Crimes (Taxation Offences) Act 1980 to harmonise it with the Criminal Code.

3.13 This bill makes amendments to the Crimes (Taxation Offences) Act 1980 in relation to penalties. These amendments do not change the penalties. They merely express the existing monetary penalties in terms of penalty units rather than dollar amounts, and place the penalty for each offence at the foot of each provision. [Schedule 4, item 14, section 5; item 17, section 6; item 18, subsections 7(1) and (2); item 20, section 8]

3.14 The conversion of penalties expressed in dollar amounts into penalty units is an element of harmonisation of the Crimes (Taxation Offences) Act 1980 with the Criminal Code.

3.15 It is desirable from a criminal law policy point of view that each provision which creates an offence should state the applicable penalty at the foot of the provision. This is more transparent and clearly identifies the penalty for each particular offence.

3.16 As a consequence of the above amendments, subsection 9(1) is repealed. This provision previously stated the penalty for offences against the Crimes (Taxation Offences) Act 1980. It is no longer required due to the amendments to ensure that the penalty for each offence is stated at the foot of each provision. [Schedule 4, item 21, subsection 9(1)]

3.17 This bill makes amendments to ensure that the use of phrases relating to 'purpose' are clarified. These amendments do not change the legal effect of the provisions. They merely ensure that the provisions are interpreted in the same way after the application of the Criminal Code as they were prior to its application. [Schedule 4, item 11, paragraphs 3(2)(a) and (b); item 12, subsection 5(1); item 13, paragraph 5(2)(a); item 15, subsection 6(1); item 16, paragraph 6(2)(a); item 19, paragraph 7(3)(b); item 22, subsections 13(2), 14(2), 15(2), 16(2), 17(2), 18(2), 19(2) and 20(2)]

3.18 The term 'purpose' may be ambiguous as to whether it creates an additional fault element of an offence, or whether it is part of the physical element of result. These amendments replace phrases relating to 'purpose' with phrases relating to 'intention'. This makes it clear that this is an additional fault element of the offence, and not part of the physical element of result. These amendments ensure consistency with the Criminal Code.

Application and transitional provisions

3.19 These amendments will apply from the day following Royal Assent. This will ensure that these amendments do not have any retrospective application.

3.20 These amendments will only apply to acts or omissions after this date of commencement. [Schedule 4, items 10 and 23]