Explanatory Memorandum
(Circulated by the authority of the Treasurer,the Hon. J. Kerin, M.P.)Increase in the rate of Fringe Benefits Tax
General Outline and Financial Impact
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- The Fringe Benefits Tax Amendment Bill 1991 will amend the Fringe Benefits Tax Act 1986 to increase the rate of tax on fringe benefits from 47% to 48.25%.
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- Proposal announced : This proposal was announced in the 1991/92 Budget.
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- Financial Impact :The amendment will result in estimated gains to the revenue of $35 million in 1992/93 and $37 million in 1993/94.
Explanation of the proposed amendments
This Bill will amend section 6 of the Fringe Benefits Tax Act 1986 to increase the fringe benefits tax(FBT) rate from 47% to 48.25%. This amendment will align the FBT rate with the top marginal personal tax rate plus medicare levy. [Clause 3]
Commencement date
The amendment will have effect from 1 April 1992, the commencement of the next FBT year. [Clause 4]
Clauses involved in the proposed amendments
Clause 3 : amends section 6 of the Fringe Benefits Tax Act 1986 to increase the rate of tax.
Clause 4 : provides that the increased rate will apply from 1 April 1992.
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