House of Representatives

Taxation Laws Amendment Bill (No. 2) 1986

Taxation Laws Amendment Act (No. 2) 1986

Income Tax (Securities and Agreements) (Withholding Tax Recoupment) Bill 1986

Explanatory Memorandum

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


Taxation Laws Amendment Bill (No. 2) 1986

The accruals method for taxing the income accruing to resident investors from discounted and other deferred interest securities, by bringing forward the taxing point of this income, will redress the tax deferral advantages that such securities offer. The new taxing basis will result in some unquantifiable gains to revenue.

The amendments being made to strengthen the interest withholding tax provisions of the income tax law in relation to discounted and other deferred interest securities will prevent a continued loss of revenue. The impact on revenue of prior exploitation cannot be measured.

The proposed amendments of the rebate provisions applicable to certain employment termination payments are not expected to have any significant effect on revenue.

The revenue cost of extending the income tax gift provisions to admit the Pearl Watson Foundation Limited is estimated at less than $10,000 in a full financial year.

The amendment of the income tax secrecy provisions is for administrative purposes only and should have no effect on revenue.

The estimated cost of exempting from tax certain allowances paid under the Formal Training Allowance is nil in 1985- 86, $100,000 in 1986-87 and $200,000 in a full year.

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