House of Representatives

Explanatory Memorandum

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

Chapter 3 - Secrecy provisions

Outline of chapter

3.1 Schedule 3 to this Bill amends the Income Tax Assessment Act 1936 (ITAA 1936) to expand the purposes for which business income tax information may be disclosed to the Australian Statistician.

Context of amendments

Australian Statistician

3.2 Currently, paragraph 16(4)(ga) of the ITAA 1936 only enables disclosure of information by the Commissioner of Taxation (Commissioner) to the Australian Statistician for the limited purposes of conducting periodic surveys and compilation of the Australian national accounts. This limits the ability of the Australian Bureau of Statistics (ABS) to use such data for wider statistical purposes, including developing a longitudinal database of businesses.

3.3 These amendments expand the purposes for which information is currently disclosed to enable the Commissioner to provide the Australian Statistician with business income tax information collected under the ITAA 1936 for the purposes of the Census and Statistics Act 1905 , as requested by the Australian Statistician.

Summary of new law

3.4 The amendments to the ITAA 1936 enable disclosure of business income tax information as requested by the Australian Statistician for the purposes of the Census and Statistics Act 1905 .

Comparison of key features of new law and current law

Detailed explanation of new law

Australian Statistician

3.5 Schedule 3 amends the ITAA 1936 by:

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repealing paragraph 16(4)(ga) and substituting with new paragraphs (ga) and (gb). Paragraph (ga) is a rewrite of the current subparagraph (ga)(i). Paragraph (gb) is a rewrite of the current subparagraph (ga)(ii). It expands the purposes for which information in relation to the business requested by the Australian Statistician may be used by omitting the purposes set out in sub-subparagraphs (BA), (C) and (D) of the current subparagraph (ga)(ii) [Schedule 3, item 1]

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omitting the words 'paragraph (4)(ga)' under subsection 16(4AA), which is the interpretation provision of paragraph 16(4)(ga), and substituting with 'paragraphs 4(ga) and (gb)' [Schedule 3, item 2] .

3.6 At present, paragraph 16(4)(ga) of the ITAA 1936 only permits the disclosure of information to the Australian Statistician for the purposes of conducting:

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periodic surveys of research and development activities

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periodic surveys of industries

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compilation of the Australian national accounts.

3.7 This imposes restrictions on the role of the ABS in making effective use of administrative datasets, such as business income tax data, for wider statistical purposes. No such restriction exists in relation to the role of the ABS in using tax data provided by the Commissioner under other taxation laws.

3.8 This amendment enables the Commissioner to provide the Australian Statistician with business income tax information collected under the ITAA 1936 for the purposes of the Census and Statistics Act 1905 , as requested by the Australian Statistician. This will assist the ABS to fulfil its mission of providing high quality, objective and responsive national statistical services. In particular, the ABS would be able to expand its use of information to other important and emerging statistical purposes, including:

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development of a longitudinal database of businesses

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producing regional small business outputs.

Application and transitional provisions

3.9 These amendments will commence on Royal Assent and apply to communications or disclosures of information from the day after Royal Assent (regardless of whether the information was acquired before or after that commencement). [Schedule 3, item 5]

3.10 This will ensure that the amendments do not have any retrospective application.