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  • Tobacco Stakeholder Group minutes 27 April 2017

    Meeting details

    Venue: ATO Office, 747 Collins Street, Docklands

    Date: 27 April 2017

    Start: 10.30am Finish: 12.30pm

    Chair: Rajitha Srikhanta

    Secretariat: Rowena Troth

    Attendees

    Rajitha Srikhanta

    ATO

    Kent Perdrisat

    ATO

    Michael O'Rourke

    ATO

    Gary Chell

    ATO

    Anthony O'Connell

    ATO

    Susan Bultitude

    The Treasury

    Rebecca Joiner

    The Treasury

    Sasha Billett

    Department of Immigration and Border Protection (DIBP)

    Susan Turville

    Department of Immigration and Border Protection (DIBP)

    Steve Bray

    Australian Competition and Consumer Commission (ACCC)

    Gary Dickson

    Imperial Tobacco Australia

    Josh Fett

    British American Tobacco Australia Ltd (BATA)

    Saminda Fernando

    British American Tobacco Australia Ltd (BATA)

    Anita Lai

    British American Tobacco Australia Ltd (BATA)

    Barry Wilson

    British American Tobacco Australia Ltd (BATA)

    Michael Ritter-Leva

    Philip Morris Limited

    Kim Jessop

    Richland Express Pty Limited

    Pradeep Kumar

    Richland Express Pty Limited

    Rowena Troth

    ATO - Secretariat

    Apologies:

    Peter Vujanic

    ATO

    Danni Bouris

    Imperial Tobacco Australia

    Neville Matthew

    Australian Competition and Consumer Commission (ACCC)

    Mark Powell

    Philip Morris Limited

    Discussion summary

    Disclaimer

    The Tobacco Stakeholder Group agendas, minutes and related papers are not binding on the ATO, DIBP or the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.

    Agenda item 1 – Welcome

    Introductions, review of action items and previous minutes.

    Outcome: Raj Srikhanta welcomed all to the meeting.

    The minutes of the previous meeting of 25 November 2016 had been finalised and issued with the papers for this meeting. All action items had been finalised.

    The Chair called for any conflicts of interest to be declared. No conflicts of interest were declared by members.

    Agenda item 2 – Agency updates - ATO, DIBP and ACCC

    Australian Taxation Office (ATO) - Outcomes

    Reinventing the ATO Update – Raj Srikhanta 

    Raj Srikhanta advised members of the four key priorities to be delivered as part of the ATO's 2016/17 Investment Plan. These included 'Tax Time 17', 'Super Reform', 'Single Touch Payroll' and 'Business Registration Services'.

    Action Item 27042017-2-1 – An information pack regarding the ATO's Single Touch Payroll initiative to be provided to TSG members.

    With regard to initiatives relating to excise stakeholders, design workshops had been held for the Contemporary Excise Experience (CEE) project. The proposal will now be submitted to the ATO's Integration Forum for consideration as part of the ATO's 2017–18 Investment Plan.

    The ATO has made public commitments for various client groups including excise payers - these are referred to as Every Year Counts commitments. The EYC commitments for excise payers for 2016-17 have been met with the implementation of 'New to WET' and 'New to Excise' tailored support initiatives and consultation undertaken with regard to the design of excise systems.

    The ATO continues to work on a whole-of-tax approach to provide a better client experience in ATO interactions.

    Excise Modernisation Update - Michael O'Rourke 

    Michael O'Rourke advised that DIBP and ATO have been working together since 2014 to put together a proposal and have provided initial costings to Treasury for consideration. The reforms would include modernisation of electronic forms, monthly payments and aligning areas in the Customs Act 1901 and the Excise Act 1901. The reform would apply to excise and customs duty payments relating to petroleum and alcohol, as well as tobacco.

    Tax Crime Update – Gary Chell 

    Gary Chell provided an update of recent operations relating to illicit tobacco. These included several seizures in Victoria and NSW since late November 2016.

    Reference was made to a recent article External Link in The Land newspaper dated 26 April 2017 reporting on these recent large seizures. The ATO contribution referred to the need for farmers leasing land to be aware of what is being grown on their land in order not to become inadvertently complicit in illegal activity.

    Department of Immigration and Border Protection (DIBP) – outcomes

    Duty Drawback Update – Sasha Billett 

    Sasha Billett advised that this issue is still being considered however there is no progress to date. Consideration also has to be given to what changes would mean to other industries - whether the cost would be outweighed by the risk. As part of any changes, DIBP are also looking to future-proof any new policy. When DIBP makes a decision, TSG members will be advised.

    Action Item 27042017-2-2 – Industry members to provide advice to Sasha Billett regarding duty drawback proposals whether members would wish to keep drawbacks if destruction procedures were introduced or whether the preference would be to retain refunds.

    DIBP Licensing Review – Sasha Billett 

    The final report for the DIBP Licensing Review was provided to the ABF Commissioner on 31 March 2017. An implementation plan is being put together and the report will then go to industry. The draft reportExternal Link, with recommendations, is currently on the DIBP website.

    Australian Trusted Trader (ATT) Update – Sasha Billett 

    There are currently 22 accredited businesses in the ATT programme, which are provided on the DIBP website. Approximately 470 businesses have submitted Expressions of Interest looking to become ATTs. DIBP are working on the implementation of initiatives including streamlined reporting and duty deferral which may be offered to ATTs. These benefits may also be extended to deferral of import processing charges and other fees. Mutual Recognition Arrangements were signed with New Zealand last year, with others in train to be signed this year (Canada, Hong Kong, Thailand, South Korea and Singapore) and others to be signed in 2018.

    Australian Competition and Consumer Commission (ACCC) – outcomes

    Application for Authorisation Update - Steve Bray 

    Steve Bray advised members that the ACCC had written to the Interested Parties in this matter on 23 March advising that the ACCC and the Applicants had agreed to extend the statutory date for the final determination until 29 June 2017, however a final decision is expected in late May / early June 2017.

    Agenda item 3 – Industry items

    Industry updates 

    Members were reminded that reports of any illicit trade can be made to Border WatchExternal Link. DIBP work with partner agencies to follow up on reports. Sasha Billett advised members that DIBP work with any sections of the supply chain and members could advise DIBP of any companies who may be interested - DIBP can approach those companies in relation to information relating to border offences. The ATO advised that they will be conducting audits regarding movement of goods in and out of warehouses and aligning bond registers with ICS data.

    2016 KPMG Report on Illicit Tobacco in Australia – Gary Dickson 

    Gary took members through a presentation of the findings of the KPMG Report on Illicit Tobacco in Australian 2016External Link. The main findings of the report included the decline in illicit tobacco from 14.1% in 2015 to 13.9% of total consumption in 2016. China and South Korea remain the main supply chains for illicit tobacco coming in to Australia. The report is under embargo to 3 May. Industry advised the process undertaken to determine counterfeit product. TSG members did not endorse the report, but noted the presentation.

    Action Item 27042017-3-1 – Gary Dickson to provide data relating to the cost of illegal product as compared to legal product to DIBP.

    Action Item 27042017-3-2 – Gary Dickson to provide an under embargo electronic version of the KPMG Report on Illicit Tobacco in Australia 2016 to Sasha Billett and Gary Chell.

    Members discussed licensing for tobacco retailing being a State / Territory responsibility. It was noted that local councils work with their Department of Health on these issues. On occasions where no action results, the information still feeds into the larger intelligence picture.

    Josh Fett reported on the recent hearing of the Parliamentary Joint Committee on Law Enforcement in March. Industry have asked for a national illicit tobacco strategy to be put in place.

    Following the November meeting of the Anti-Illicit Tobacco Retailers' Forum in Melbourne, another meeting has been held in March 2017. Representatives of large retail groups are working together on illicit tobacco. The ABF Tobacco Strike Team presented at the November forum and Victoria Police presented at the March Forum. Representatives from Queensland, NSW, Victoria and South Australia representing specialist and independent retailers around the country such as IGA participated.

    A workshop is being planned for early May in Victoria to provide an update on the KPMG 2016 Report and work with individual store operators from Melbourne and regional Victoria on education around illicit tobacco and organised crime relating to illicit product.

    Agenda item 4 – Other business

    There was no other business.

    Agenda item 5 – Wrap up and close

    The meeting concluded at 12.15pm.

      Last modified: 15 Sep 2017QC 53290