House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon. J.S. Dawkins, M.P.)

Consequential Amendments To Other Commonwealth Acts

A. Introduction

24.1 This chapter explains the consequential amendments to other Commonwealth Acts that will be necessary because of the re-write of the sales tax law.

B. Explanation and Commentary

24.2 The following Acts will be amended as a result of the new sales tax law:

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Australian National Maritime Museum Act 1990.

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Australian National Railways Commission Act 1983.

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Australian Sports Commission Act 1989.

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Australian Sports Drug Agency Act 1990.

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Consular Privileges and Immunities Act 1972.

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Crimes (Taxation Offences) Act 1980.

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Diplomatic Privileges and Immunities Act 1967.

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Freedom of Information Act 1982.

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Fringe Benefits Tax Assessment Act 1986.

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Hearing Services Act 1991.

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Income Tax Assessment Act 1936.

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Pay-roll Tax (Territories) Assessment Act 1971

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Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990

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Petroleum Resource Rent Tax Assessment Act 1987.

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Sales Tax Assessment Act (No. 1) 1930.

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Social Security Act 1991.

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Special Broadcasting Service Act 1991.

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Taxation Administration Act 1953.

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Taxation (Interest on Overpayments) Act 1983.

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Telecommunications Act 1991.

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Tobacco Charges Assessment Act 1955.

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Training Guarantee (Administration) Act 1990.

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University of Canberra Act 1989.

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Wool Tax (Administration) Act 1964 [clause 16 and the Schedule]

Australian National Maritime Museum Act 1990

24.3 Existing Law: The Act currently provides that the transactions of the Museum in respect of goods for use and not for sale by them are not subject to sales tax.

24.4 Change: The Act will be amended to ensure that the Museum retains its exemption from sales tax under the new law for goods purchased for use by the Museum.

Australian National Railways Commission Act 1983

24.5 Existing Law: This Act provides that the Australian National Railways Commission can make a regulation to deem them not to be a public authority for the purposes of item 77 of the First Schedule of the Sales Tax (Exemptions and Classifications) Act 1935. The Commission would then be liable to pay sales tax on their dealings.

24.6 Change: The Act will be amended to allow the provision to apply to the equivalent item under the new law.

Australian Sports Commission Act 1989

24.7 Existing Law: The Act currently provides that the transactions of the Sports Commission and the Australian Sports Foundation in respect of goods for use and not for sale by them are not subject to sales tax.

24.8 Change: The Act will be amended to ensure that both bodies retain their exemption from sales tax under the new law for goods purchased for use by both the Sports Commission and the Sports Foundation.

Australian Sports Drug Agency Act 1990

24.9 Existing Law: The Act currently provides that the transactions of the Australian Sports Drug Agency in respect of goods for use and not for sale by them are not subject to sales tax.

24.10 Change: The Act will be amended to ensure that the Drug Agency retains its exemption from sales tax under the new law for goods purchased for use by the Drug Agency.

Consular Privileges and Immunities Act 1972

24.11 Existing Law: Under this Act, Consular officials are allowed to bring certain goods into Australia free of sales tax.

24.12 Change: The Act will be amended to ensure that this concession will be available under the new sales tax legislation.

Crimes (Taxation Offences) Act 1980

24.13 Existing Law: This Act provides for penal sanctions to counter sales tax evasion practices where tax that is lawfully payable cannot be collected because the taxpayer has deliberately set up a business so that there are insufficient funds to meet any sales tax liability. It is an offence for a person to enter into an arrangement so that a company or trustee is unable to pay sales tax or future sales tax, or to aid or abet another person to enter into such an arrangement.

24.14 Change: The Act will be amended to insert a new Part IIA which will apply the existing provisions relating to sales tax evasion to offences committed under the new law.

Diplomatic Privileges and Immunities Act 1967

24.15 Existing Law: Under this Act, Diplomats are allowed to bring certain goods into Australia free of sales tax.

24.16 Change: The Act will be amended to ensure that this concession will be available under the new sales tax legislation.

Freedom of Information Act 1982

24.17 Existing Law: A person may obtain access to documents under the control of the Commissioner containing any personal information about their sales tax dealings.

24.18 Change: This Act will be amended to exempt from an FOI request information that is not allowed to be disclosed under the Sales Tax Assessment Bill 1992, unless the information contains personal information about the person requesting it.

Fringe Benefits Tax Assessment Act 1986

Income Tax Assessment Act 1936

Pay-roll Tax (Territories) Assessment Act 1971

Petroleum Resource Rent Tax Assessment Act 1987

Sales Tax Assessment Act (No. 1) 1930

Tobacco Charges Assessment Act 1955

Training Guarantee (Administration) Act 1990

Wool Tax (Administration) Act 1964

24.19 Existing Law: Under these Acts a liquidator of a company is required to set aside, out of the assets available to the company to pay ordinary debts, an amount to cover any 'prescribed tax' that is owing by the company. The Commissioner is required to notify the liquidator as soon as practicable of the amount of tax that is or may become payable under any tax Act listed In that law.

24.20 Change: The liquidator provisions of these Acts will be amended to remove the list of Commonwealth Tax Acts that have corresponding liquidator provisions. A simpler definition of 'prescribed tax' will require the Commissioner to notify the liquidator or asset holder of any amounts of tax owing under any Act administered by the Commissioner that has equivalent rules for a liquidator. The words 'any amount that the Commissioner is required to notify under a section of another Act that corresponds to this section' will replace the specific listing so that an amendment will not be required every time a new Tax Act is enacted.

Hearing Services Act 1991

24.21 Existing Law: The Act currently provides that the transactions of the Hearing Services Authority in respect of goods for use and not for sale by them are not subject to sales tax.

24.22 Change: The Act will be amended to ensure that the Authority retains its exemption from sales tax under the new law for goods purchased for use by the Authority.

Petroleum (Australia - Indonesia Zone of Cooperation) Act 1990

24.23 Existing Law: This Act provides the conditions for a treaty between Australia and Indonesia over an area between Indonesian East Timor and Northern Australia. Goods imported into the area by either party are not subject to sales tax by the other party. If the goods are permanently transferred to another part of Australia they will then be subject to sales tax.

24.24 Change: The Act will be amended to allow this concession to continue under the new legislation.

Social Security Act 1991

24.25 Existing Law: Section 1037 of this Act provides that a mobility allowance is not payable to a person who is eligible to purchase a motor vehicle free of sales tax under items 135 or 135A of the First schedule to the Sales Tax (Exemptions and Classifications) Act 1935.

24.26 Change: The Act will be amended to provide a reference to the equivalent Items of the new law. A person who purchases a tax-free motor vehicle under Items 96 or 97 of Schedule 1 of the new Sales Tax Exemptions and Classifications law will not be entitled to a mobility allowance.

Special Broadcasting Service Act 1991

24.27 Existing Law: The Act currently provides that the Broadcasting Service is not liable to pay tax under any law of the Commonwealth relating to sales tax.

24.28 Change: The Act will be amended to ensure that the Broadcasting Service retains its exemption from sales tax under the new law for goods purchased for use by the Broadcasting Service.

Taxation Administration Act 1953

24.29 Offences relating to statements made to a taxation officer:

Existing Law: It is an offence to make a false or misleading statement to a taxation officer. Subsection 8J(2) of this Act specifically excludes any statement made in a document in response to a request for information made by the Commissioner under subsection 23(1) of the Sales Tax Assessment Act (No. 1) 1930.

Change: Subsection 8J(2) will be amended to ensure that this exclusion continues to apply in relation to statements made in response to the equivalent provision in the new law (clause 108).

24.30 Penalty taxes to be alternative to prosecution for certain offences:

Existing Law: Section 8ZE provides for penalty taxes to be an alternative to prosecution for certain offences such as failing to lodge returns or making untrue statements under section 45 of the Sales Tax Assessment Act (No. 1) 1930.

Change: Subsection 8ZE(3) will be amended to ensure that prosecution will continue to be an alternative to administrative penalties imposed under the new law (clauses 96 and 97) .

24.31 Definition of delayed administration (beneficiary) objection:

Existing Law: A person who has an interest in the estate of a deceased person may lodge an objection against any assessment of tax made by the Commissioner.

Change: This Act will be amended to include a reference to subclause 73(4) of the new law to allow interested persons to lodge objections against assessments made under the new law.

24.32 Definition of delayed administration (trustee) objection:

Existing Law: A trustee of an estate of a deceased person may lodge an objection against any assessment of tax made by the Commissioner.

Change: This Act will be amended to include a reference to subclause 72(7) of the new law to allow trustees to lodge objections against assessments made under the new law.

24.33 Registration-type sales tax decision:

Existing Law: A person may lodge an objection against a decision by the Commissioner to refuse to register them for sales tax purposes or for cancelling their registration as set out in the sales tax law.

Change: This Act will be amended to include references to the relevant sections of the new law that cover registration and cancellation of registration.

24.34 Ineligible sales tax remission decisions:

Existing Law: If a person fails to provide a return or other information in respect of goods or makes an untrue statement pursuant to s45 of Sales Tax Assessment Act (No. 1) 1930. When a penalty of up to double the excess of tax avoided will apply. A person may object against this penalty decision only if the amount is more than $20 and more than 20% per year of the tax avoided.

Change: This definition will be amended to cover the equivalent provision in the new sales tax law. Under the new law this penalty provision will also apply to a person who obtains a tax benefit under an avoidance scheme.

Taxation (Interest on Overpayments) Act 1983

24.35 The definition of 'relevant tax' will be amended to include a reference to the new Sales Tax Assessment Bill 1992. This will ensure that a taxpayer who has paid tax under the new law and has a successful objection against the amount of tax paid will receive interest on any tax overpaid.

Telecommunications Act 1991

24.36 Existing Law: The Act currently provides that the AUSTEL is not liable to pay tax under any law of the Commonwealth relating to sales tax.

24.37 Change: The Act will be amended to ensure that the AUSTEL retains its exemption from sales tax under the new law for goods purchased for use by the AUSTEL.

University of Canberra Act 1964

24.38 Existing Law: The Act currently provides that the University is not liable to pay tax under any law of the Commonwealth relating to sales tax.

24.39 Change: The Act will be amended to ensure that the University retains its exemption from sales tax under the new law for goods purchased for use by the University.

Government Authorities exempt from sales tax

24.40 Existing Law: Certain Commonwealth Government Authorities have an exemption from paying sales tax if they were set up before 14 May 1987. If a Government authority was set up after that date their enabling legislation must specifically provide for an exemption from sales tax.

24.41 Change: There will be no change to the effect of these provisions under the new law. Those authorities that were exempt under the existing law will retain their exemptions under the new law. [clause 130 of the Sales Tax Assessment Bill 1992]