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House of Representatives

A New Tax System (Tax Administration) Bill (No. 2) 2000

Supplementary Explanatory Memorandum & Correction to the Explanatory Memorandum

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

Glossary

The following abbreviations and acronyms are used throughout this Explanatory Memorandum.

Abbreviation Definition
AAT Administrative Appeals Tribunal
ABN Australian Business Number
ABN Act A New Tax system (Australian Business Number) Act 1999
ABR Australian Business Register
BAS business activity statement
Commissioner Commissioner of Taxation
Customs Act Customs Act 1901
DFRS Diesel Fuel Rebate Scheme
Excise Act Excise Act 1901
FBT fringe benefits tax
FBTAA 1986 Fringe Benefits Tax Assessment Act 1986
GST goods and services tax
GST Act A New Tax System (Goods and Services Tax) Act 1999
ITAA 1936 Income Tax Assessment Act 1936
ITAA 1997 Income Tax Assessment Act 1997
LCT luxury car tax
PAYG pay as you go
RPA recognised professional association
STAA 1992 Sales Tax Assessment Act 1992
TAA 1953 Taxation Administration Act 1953
WET wine equalisation tax
WET Act A New Tax System (Wine Equalisation Tax) Act 1999

General outline and financial impact

Technical amendments

The amendments to this Bill will clarify particular aspects of the:

·
provision of tax services by registered tax agents and lawyers;
·
delivery of BAS services by members of a recognised professional association from 1 July 2000; and
·
administrative penalty regime and approved form provisions so that those areas of the law operate as intended.

The amendments will also modify previously enacted areas of the law to support the new tax system from 1 July 2000. These amendments include:

·
an extension to the provisions in the ITAA 1997 which provide an immediate write-off of GST-related expenditure;
·
an exclusion for wholly input taxed supplies from the no ABN withholding event in the PAYG withholding provisions in Schedule 1 to the TAA 1953; and
·
a modification to the application provisions of the standardised collection and recovery rules in Schedule 1 to the TAA 1953.

Date of effect: The amendments will generally apply from 1 July 2000.

Proposal announced: The modifications to the GST- related expenditure were announced in Treasurer's Press Release No. 40 of 23 May 2000. The other amendments have not been previously announced.

Financial impact: The amendments are not expected to have a financial impact.

Compliance cost impact: The amendments are not expected to have an impact on compliance costs.

Summary of regulation impact statement

A regulation impact statement was provided in the explanatory memorandum to this Bill. A further statement is not required.

Amendments to Customs Act 1901 and Excise Act 1901 for the Diesel and Like Fuels Rebate Scheme

The amendments will enable a rebate of duty to be paid for the off-road business use of 'like fuels' for eligible purposes, by amending the provisions of the Customs Act and the Excise Act relating to the DFRS.

Date of effect: The amendments will commence from 1 July 2000 so that the extended rebate will be available for fuel purchased for use on or after 1 July 2000. The rebate will not be available for fuel purchased for use after 30 June 2002, when it is intended that it will be replaced by a new Energy Grants (Credits) Scheme. The amendments are technical amendments enabling rebate rates to be declared. As such, the amendments have no financial impact or compliance cost in themselves. The financial impact and compliance cost information below relate to the expansion of the DFRS as a whole.

Proposal announced: The significant reduction in the cost of fuel to business, particularly in the categories of heavy transport, marine transport and rail was announced by the Government on 28 May 1999 as part of the agreement between the Government and the Australian Democrats.

Financial impact: The expansion of the DFRS will cost an additional $420 million in the 2000-2001 financial year and $480 million in the 2001-2002 financial year.

Compliance cost impact: Medium. The amendments to the DFRS will have little effect on those currently entitled to a rebate under the scheme. Those categories of users presently entitled to claim a rebate are already required to keep records to substantiate their claim. The substantiation requirements for those entitled to claim the rebate as a consequence of these amendments will be the same as for those previously entitled.

Application: The rebate for like fuels will be available for fuel purchased for use between 1 July 2000 and 30 June 2002. It is intended that from 1 July 2002 the DFRS will be replaced by an Energy Grants (Credits) Scheme.

Access to ABN information

Amendment 31 inserts a new Schedule 4C into the Bill. New Schedule 4C amends the ABN Act to limit public access to details contained in the ABR.

Under existing law, state, territory and local government bodies are able to obtain, through public access to the ABR, sufficient ABN information to carry out their functions. However, the amendments to limit public access would severely restrict the information that state, territory and local government bodies could obtain. Therefore, the amendments also enable state, territory and local government bodies to access ABN information in the same way as the Commonwealth accesses ABN information.

Date of effect: From 1 July 2000.

Proposal announced: Not previously announced.

Financial impact: The amendment will not alter the financial impact of the ABN Act.

Compliance cost impact: The amendment will not alter the compliance cost impact of the ABN Act.

Chapter 1 - Technical amendments

Outline of Chapter

1.1 This Chapter explains amendments to A New Tax System (Tax Administration) Bill (No. 2) 2000 to clarify particular aspects of the:

·
provision of tax services by registered tax agents and lawyers;
·
delivery of BAS services by members of a recognised professional association from 1 July 2000; and
·
administrative penalty regime and approved form provisions so that those areas of the law operate as intended.

1.2 This Chapter also explains amendments being introduced to previously enacted areas of the law to support the new tax system from 1 July 2000. These amendments include:

·
an extension to the provisions in the ITAA 1997 which provide an immediate write-off of GST-related expenditure;
·
an exclusion for wholly input taxed supplies from the no ABN withholding event in the PAYG withholding provisions in Schedule 1 to the TAA 1953; and
·
a modification to the application provisions of the standardised collection and recovery rules in Schedule 1 to the TAA 1953.

Context of reform

1.3 The Bill as introduced provides the legislation necessary for a uniform administrative penalty regime to cover the taxation laws administered by the Commissioner. It also consolidates the current income tax and FBT arrangements which deal with registered tax agents, and provides a regime for people other than registered tax agents to prepare and lodge a BAS and advise on BAS matters.

1.4 Concerns have been expressed by tax practitioners that the provisions in this Bill do not reflect the current arrangements. Amendments are being made to address those concerns and further clarify the new arrangements. Some minor technical amendments are also being made to the proposed administrative penalty regime and the provisions relating to approved forms.

1.5 The amendments being made in relation to deductibility of GST-related expenditure, the no ABN withholding event and the standardised collection and recovery rules are necessary to ensure a smooth transition to the new tax system from 1 July 2000.

Date of effect

1.6 The amendments will generally apply from 1 July 2000. Amendments relating to FBT matters will apply from 1 April 2001.

Detailed explanation of new law

Administrative penalties

Amendment 3

1.7 Section 284-15 of the administrative penalty regime in Schedule 1 to this Bill currently provides that a matter is reasonably arguable if 'what is argued for is as likely to be correct as incorrect'. Although a commonsense approach would imply that a position on the application of the law is reasonably arguable where 'it is more likely correct than incorrect', the concept is being clarified by expressly referring to such a position. Paragraphs 1.20 to 1.29 of the explanatory memorandum to this Bill provide a detailed explanation of the reasonably arguable standard.

Amendment 4

1.8 A shortfall amount under section 284-80 includes an amount of an overclaimed credit under a tourist refund scheme in Division 168 of the GST Act. This amendment will ensure that the section also includes an overclaimed credit under a tourist refund scheme in Division 25 of the WET Act.

Amendment 5

1.9 Section 284-145 deals with the liability to an administrative penalty in relation to schemes. Subparagraph 284-145(1)(b)(ii) is amended to refer to the principal effect of a scheme under Division 165 of the GST Act.

Amendment 6

1.10 Division 284 imposes an administrative penalty where there is a shortfall amount or a scheme shortfall amount. In certain circumstances, some shortfall amounts may be reduced. Under subsection 284-215(2) the shortfall amount resulting from a statement that is false or misleading is reduced where the taxpayer, or the taxpayer's agent, took reasonable care in making the statement.

1.11 This amendment to subsection 284-215(2) clarifies that the shortfall amount is reduced only for the purposes of calculating the administrative penalty. The reduction in the shortfall amount does not reduce the amount of the underlying tax liability.

Amendment 8

1.12 This amendment will align the FBT instalment variation threshold with the PAYG instalment variation threshold at 85%. It will allow taxpayers a wider variation discrepancy on estimated FBT payable before the general interest charge is imposed.

Amendment 9

1.13 This amendment corrects the date from which the current penalty provisions in the FBTAA 1986 cease to operate. That is, they will not apply to the FBT year commencing 1 April 2001 as this is when the new penalty regime will apply to FBT matters.

Tax agents

Amendment 10

1.14 This amendment corrects the note in section 119 of the FBTAA 1986 that refers to section 251L of the ITAA 1936 for rules prohibiting unregistered or excluded people from charging a fee for tax agent services.

Amendment 11

1.15 This amendment makes a minor correction to the definition of 'BAS provisions' in section 251A of the ITAA 1936.

Amendment 12

1.16 The definition of a taxation law in section 251A of the ITAA 1936 is being amended to exclude certain Acts. The definition in the Bill refers to the tax dictionary which includes all Acts for which the Commissioner has general administration. The amendment will clarify that the registered tax agent provisions do not apply to excise and diesel fuel rebate matters for which the Commissioner has responsibility under a delegation from the Chief Executive Officer of Customs. The amendment will also exclude diesel fuel grant and sales tax matters from the tax agent restrictions. This will clarify that sales tax consultants, licensed customs brokers and other indirect tax law consultants can continue to provide those services without having to be registered as tax agents.

Amendments 13, 17 and 18

1.17 Subsection 251L(8) is being introduced into the ITAA 1936 by Schedule 2 to the Bill to exclude certain services provided by legal practitioners from the tax agent rules. This provision will replace subsection 251L(4) of the ITAA 1936 and subsection 119(2) of the FBTAA 1986 which permit a solicitor or counsel (who is not a registered tax agent), while acting in the course of his or her profession, to:

·
prepare any objection;
·
undertake litigation or proceedings before a board, the AAT or a court;
·
act in an advisory capacity in connection with the preparation of any income tax return, FBT return or FBT objection; or
·
act in an advisory capacity in connection with any income tax or FBT matter.

1.18 Concerns have been raised by legal practitioners that the Bill will limit these services and compromise their ability to represent taxpayers, despite subsection 251L(8) which allows legal practitioners to undertake all these services. Nevertheless, it is being amended to clarify that solicitors and barristers, acting in the course of their profession, can deal with the Commissioner in relation to giving advice about taxation laws and certain other services for which they are permitted to charge a fee.

1.19 Legal practitioners will be able to prepare or lodge a notice, application or other document on behalf of taxpayers about a liability under a taxation law. However, they are not permitted to prepare or lodge tax returns or activity statements, except in the capacity of the trustee or legal personal representative for a trust or a deceased estate. The amendments also clarify that, although there are rights conferred upon them by various state and territory laws, solicitors and barristers are able to undertake litigation or proceedings about taxation matters.

1.20 Legal practitioners have also expressed concern that the Bill will allow registered tax agents (who are not lawyers) to give legal advice about taxation laws. This is against a background where subsection 251L(1) of the ITAA 1936 and subsection 119(1) of the FBTAA 1986 currently allow registered tax agents to advise taxpayers in relation to preparing tax returns and objections, and to transact any business in income and FBT matters. To avoid any uncertainty about what constitutes legal advice, the amendments will remove the references to 'legal'.

1.21 Further consideration of what advice can be provided by registered tax agents, legal practitioners, accountants and other advisers will be undertaken as part of a review of tax agent services, as explained in paragraphs 2.21 to 2.22 in the explanatory memorandum to the Bill. Until that review is completed, these amendments will allow current practices in relation to giving advice on tax matters to continue to operate as well as provide a basis for certain other people to provide BAS services under the new tax system from 1 July 2000.

Amendment 14

1.22 Under the amendments in Schedule 2 to the Bill, paragraph 251L(1)(c) of the ITAA 1936 restricts preparing or lodging an objection to an assessment on behalf of a taxpayer to registered tax agents. Legal practitioners are excluded from this restriction by virtue of paragraph 251L(8)(b). This amendment will expand the scope of tax agent services to all objections covered by Part IVC of the TAA 1953, that is, objections against assessments, private rulings and remission decisions under 'taxation laws', as defined. Legal practitioners will also be allowed to object against all these matters on behalf of their clients.

Amendment 15

1.23 Schedule 2 to the Bill introduces subsection 251L(6) into the ITAA 1936 to allow certain people to provide BAS services for a fee, without the need to be a registered tax agent or excluded by the legal practitioner provisions. Subsection 251L(6) will enable members of an RPA, bookkeepers working under the direction of registered tax agents and payroll bureaus to assist businesses with their obligations under the new tax system.

1.24 Most RPAs have several categories of membership, including members who are studying for relevant qualifications and members who have retired from practice. The Bill currently allows any member of an RPA to provide BAS services. Paragraph 251L(6)(a) will be amended to prevent student members and retired members from undertaking BAS service work.

Amendment 16

1.25 Licensed customs brokers will be providing certain indirect tax law work that is ancillary to their customs services. An amendment is being made to allow them to undertake BAS services but only so far as it relates to importations or exports of goods relating to GST, LCT or WET.

Amendment 19

1.26 This amendment will modify the meaning of an RPA in section 251LA to broaden the eligibility criteria for RPA status. An organisation that is not established as a professional body but has a role in providing education, information and training about taxation laws will be able to qualify for RPA status under the amended criteria. This will expand the number of people who can provide BAS services by allowing tax practitioners who are not members of the professional bodies, but who are members of taxation practitioner bodies that have an educative or training role, to provide BAS services.

Amendments 20 and 21

1.27 Subsection 251LA(5) in Schedule 2 to the Bill deals with the requirement for a member of an RPA to hold certain qualifications. An amendment is being made to exclude student members of RPAs from this rule so that an organisation with student members can still be an RPA. Another amendment is being made to permit organisations to satisfy the requirement in paragraph 251LA(5)(c) where the organisation has members who are exempt from holding certain qualifications. For example, this would apply to long-serving members of professional bodies who obtained membership prior to the body requiring members to hold qualifications.

Amendments 22, 23 and 24

1.28 These amendments make minor corrections to the provisions of subsection 251LA(6) in Schedule 2 to the Bill, relating to the continuing professional excellence and conduct requirements of an RPA.

Amendment 34

1.29 Section 995-1 of the ITAA 1997 is amended to remove references to section 251L of the ITAA 1936 from the Dictionary definition of 'recognised tax adviser'.

Approved forms

Amendments 25 and 26

1.30 Division 388, which deals with requirements about giving material to the Commissioner, is introduced into Schedule 1 to the TAA 1953 by Schedule 2 to the Bill. An important element of these requirements is the concept of an approved form. The provisions relating to approved forms will apply to returns and other material to be provided to the Commissioner for the 2000-2001 year. This amendment will ensure that all amendments relating to approved forms will commence to apply on the same date.

Amendment 27

1.31 This amendment corrects the date on which the approved forms provisions will commence to apply to FBT matters. That is, they will apply for the year commencing 1 April 2001.

BAS provisions

Amendment 32

1.32 This amendment will modify the definition of 'BAS provision' in the Dictionary in section 995-1 of the ITAA 1997 to insert the term 'sales tax law'. The term has the same meaning as in section 5 of the STAA 1992. This amendment will enable sales tax credits to be an amount to which the delayed refund interest provisions apply under Part IIIAA of the TAA 1953.

Standardised collection and recovery rules

Amendment 7

1.33 Part 4-15 in Schedule 1 to the TAA 1953 contains standardised rules for the collection and recovery of tax-related liabilities and other amounts. These rules will generally apply from 1 July 2000. In particular, it was intended that the procedural and evidentiary rules would apply to all recovery proceedings after 1 July 2000.

1.34 The application provisions of the A New Tax System (Tax Administration) Act 1999 provide for these rules to apply to continuing proceedings which were commenced before 1 July 2000, and to new proceedings for tax-related liabilities arising on or after 1 July 2000. However, the application provisions did specifically not address those proceedings which commence on or after 1 July 2000 for tax-related liabilities arising before that time.

1.35 This amendment ensures that the new procedural and evidentiary rules will apply to these proceedings. The standardised rules will then apply to all recovery proceedings on or after 1 July 2000.

Extension of immediate write-off of GST- related expenditure

Amendment 29

1.36 The Parliament has already enacted an immediate income tax deduction for small and medium sized businesses for expenditure incurred between 1 July 1999 and 30 June 2000 in acquiring or upgrading plant or software to prepare for the GST. The deduction is available where the annual turnover of an entity (including any connected entities) does not exceed $10 million.

1.37 Under the current legislation, it is a precondition for the immediate write-off that before 1 July 2000 a taxpayer use the plant or software, or install it ready for use, to produce assessable income. Where a taxpayer is acquiring plant, it is also necessary that the taxpayer becomes the owner before 1 July 2000.

1.38 It was announced in Treasurer's Press Release No. 40 of 23 May 2000 that these conditions will be relaxed.

1.39 A taxpayer will qualify for the immediate deduction if the taxpayer enters into a contract to purchase the plant or software before 1 July 2000. A taxpayer that is making or upgrading plant or software 'in-house' will also qualify if it incurs the expenditure before 1 July 2000. Consequently, it will not be necessary that the taxpayer has paid for the plant or software by that date. [Schedule 4A, items 1 to 3, 6, 11 and 12, subsections 25-80(1) and 42-168(1) of the ITAA 1997]

1.40 To protect the extension of the concession against possible abuse, before 1 July 2001 taxpayers will have to use the plant or software (or install it ready for use) to produce assessable income. For a taxpayer acquiring plant, it will also be necessary that the taxpayer become the owner before 1 July 2001. If a taxpayer has already obtained an immediate deduction in an assessment but fails to satisfy these conditions, the Commissioner can amend the assessment to disallow the deduction. [Schedule 4A, items 4, 7 and 12, subsections 25-80(1) and 42-168(1)]

1.41 There will also be a technical amendment of section 25-80, which covers expenditure on upgrading plant to prepare for the GST. This amendment will ensure that the immediate deduction is only allowable to the extent that the taxpayer uses the upgraded plant to produce assessable income. The acquisition of plant or software and the upgrading of software are covered by the depreciation provisions which, under section 42-170, already reduce the deduction allowable to the extent that the plant or software is not used to produce assessable income (e.g. if it is used for private purposes). [Schedule 4A, item 9, subsections 25-80(4) and (5)]

1.42 The extension of the concession to apply where a taxpayer has not acquired the plant or software by 30 June 2000 has necessitated supplementary rules about plant or software not used exclusively to produce assessable income. Where the taxpayer does not yet have the plant or software at 30 June 2000, any reduction in the deduction for non-income producing use will be determined by what can reasonably be expected at 30 June 2000. [Schedule 4A, items 9 and 16, subsections 25-80(5), 42-170(4) and (5)]

Exclusion of input taxed supplies from no ABN withholding arrangements

Amendment 28

1.43 The A New Tax System (Pay As You Go) Act 1999 introduced the new PAYG withholding system into the TAA 1953 for the collection of income tax. An element of the system is the no ABN withholding obligation provided in section 12-190 of Schedule 1 to the TAA 1953. Under that provision, an enterprise is required to withhold from a payment for a supply of goods or services by another enterprise where the supplier does not quote its ABN (unless one of the exceptions applies).

1.44 Section 12-190 of Schedule 1 to the TAA 1953 is being amended to exclude from its operation supplies which are wholly input taxed under the GST legislation. The amendment will ensure that the no ABN withholding event does not apply to those transactions in respect of which it produces minimal compliance benefit and places an unnecessary burden on taxpayers. Input taxed supplies include those related to financial services, residential rent and sales of residential property, precious metals and supplies by tuckshops as well as those specified by particular Acts. [Schedule 3, item 8A, paragraph 12-190(4)(d)]

Amendment 33

1.45 This amendment will support amendment 28 by inserting the term 'input taxed' into the Dictionary in section 995-1 of the ITAA 1997. The term will have the same meaning as in the GST law.

Correction to explanatory memorandum

1.46 Paragraph 3.64 in the explanatory memorandum to the Bill is amended as follows:

The amendment to Schedule 1 to the TAA 1953 allows the Commissioner to register a branch of a government entity or a non-profit sub-entity as a PAYG withholding branch. [Schedule 2, item 88, subsection 16-142(2); Schedule 5, items 6 and 7]

Chapter 2 - Amendments to the Customs Act 1901

Outline of Chapter

2.1 This Chapter contains technical amendments to the Customs Act. These amendments are needed to give effect to the expansion of the DFRS to include 'like fuels'.

2.2 These amendments enable the Minister to declare a lower rate of rebate in relation to the relevant 'like fuels' from 1 July 2000 until 31 December 2000 and apply the current averaging provisions to the declared lower rate from 1 January 2001.

Context of reform

2.3 Section 164 of the Customs Act provides a legislative basis for the DFRS. Customs duty is paid at the time of importation and is incorporated into the price of diesel fuel. The DFRS provides a duty rebate to the end user of the fuel when it is purchased for use in an eligible purpose.

2.4 As part of its tax reform measures, the Government is extending the DFRS from 1 July 2000 to provide a rebate for diesel and like fuels and is also adding 2 new eligible categories, marine and rail transport. Like fuels will include fuel oil and all fuels which attract the same rate of duty as diesel fuel except gasoline and certain products suitable for use as gasoline substitutes, such as, coal tar and coke oven distillates.

2.5 As heavy fuel oil attracts a concessional rate of duty (currently about 7 cents per litre compared to 44 cents per litre for diesel fuel) and light fuel oil can effectively attract that concessional rate through refund and remission arrangements, the Minister will declare a concessional rebate rate for concessional fuel usage across all eligible categories. This amendment enables the Minister to declare this concessional rate.

Detailed explanation of new law

2.6 The amendments enable the Minister to declare the rate of rebate applicable to prescribed like fuels, where those fuels are used for an eligible purpose [Schedule 4B, item 2, subsection 164(5AAC)] . The purpose of item 1 is to allow the Minister to declare a lower rate of rebate than those contained in subsection 164(5) for like fuels [Schedule 4B, item 1, subsection 164(5A)].

2.7 The purpose of subsection 164(5AAD) is to enable the Minister to declare 2 separate rebate rates for a particular type of fuel depending on the purpose for which the fuel is used. [Schedule 4B, item 2, subsection 164(5AAD)]

Example 2.1 The Minister will declare 2 separate rebate rates for light fuel oil - a higher rate when it is used in an internal combustion engine and a lower rate when it is used for other purposes. This is because light fuel oil used for other purposes attracts a partial remission of the duty paid. Light fuel oil for use in an internal combustion engine receives no remission so a higher rebate rate is necessary.

2.8 Averaging provisions presently apply in formulating the declared rate of rebate for diesel, by reference to the average rate over the previous 6 months. The amendments apply the averaging provisions to the new, lower rebate rate from 1 January 2001. The averaging provisions cannot apply for the first 6 months (July 2000 - December 2000) as there will be no concessional rebate rate in force in each of the 6 previous months [Schedule 4B, item 5, subsection 164(5ABA)] . Item 3 makes the normal averaging rules subject to the special rule in subsection 164(5ABA) [Schedule 4B, item 3, subsection 164(5AA)] .

2.9 The averaging provisions will apply to declared rates for like fuels from 1 January 2001. [Schedule 4B, item 4, paragraph 164(5AA)(b)]

Chapter 3 - Amendments to the Excise Act 1901

Outline of Chapter

3.1 This Chapter contains technical amendments to the Excise Act. These amendments are needed to give effect to the expansion of the DFRS to include 'like fuels'.

3.2 These amendments enable the Minister to declare a lower rate of rebate in relation to the relevant 'like fuels' from 1 July 2000 until 31 December 2000 and apply the current averaging provisions to the declared lower rate from 1 January 2001.

Context of reform

3.3 Section 78A of the Excise Act provides a legislative basis for the DFRS. Excise duty is paid at the time of production or distribution and is incorporated into the price of diesel fuel. The DFRS provides a duty rebate to the end user of the fuel when it is purchased for use in an eligible purpose.

3.4 As part of its tax reform measures, the Government is extending the DFRS from 1 July 2000 to provide a rebate for diesel and like fuels and is also adding 2 new eligible categories, marine and rail transport. Like fuels will include fuel oil and all fuels which attract the same rate of duty as diesel fuel except gasoline and certain products suitable for use as gasoline substitutes, such as, coal tar and coke oven distillates.

3.5 As heavy fuel oil attracts a concessional rate of duty (currently about 7 cents per litre compared to 44 cents per litre for diesel fuel) and light fuel oil can effectively attract that concessional rate through refund and remission arrangements, the Minister will declare a concessional rebate rate for concessional fuel usage across all eligible categories. This amendment enables the Minister to declare this concessional rate.

Detailed explanation of new law

3.6 The amendments enable the Minister to declare the rate of rebate applicable to prescribed like fuels, where those fuels are used for an eligible purpose [Schedule 4B, item 7, subsection 78A(5AAC)] . The purpose of item 6 is to allow the Minister to declare a lower rate of rebate than those contained in subsection 78A for like fuels [Schedule 4B, item 6, subsection 78A(5A)].

3.7 The purpose of subsection 78A(5AAD) is to enable the Minister to declare 2 separate rebate rates for a particular type of fuel depending on the purpose for which the fuel is used. [Schedule 4B, item 7, subsection 78A(5AAD)]

Example 3.1 The Minister will declare 2 separate rebate rates for light fuel oil - a higher rate when it is purchased for use in an internal combustion engine and a lower rate when it is purchased for other purposes. This is because light fuel oil used for other purposes attracts a partial remission of the duty paid. Light fuel oil for use in an internal combustion engine receives no remission so a higher rebate rate is necessary.

3.8 Averaging provisions presently apply in formulating the declared rate of rebate for diesel, by reference to the average rate over the previous 6 months. The amendments apply the averaging provisions to the new, lower rebate rate from 1 January 2001. The averaging provisions cannot apply for the first 6 months (July 2000 - December 2000) as there will be no concessional rebate rate in force in each of the 6 previous months [Schedule 4B, item 10, subsection 78A(5ABA)] . Item 8 makes the normal averaging rules subject to the special rule in subsection 78A(5ABA) [Schedule 4B, item 8, subsection 78A(5AA)] .

3.9 The averaging provisions will apply to declared rates for like fuels from 1 January 2001. [Schedule 4B, item 9, paragraph 78A(5AA)(b)]

Chapter 4 - Access to ABN information

Outline of Chapter

4.1 This Chapter explains amendments to the ABN Act which will:

·
limit public access to details contained in the ABR;
·
provide the Registrar of the ABR with the power to not publicly release any information, that would otherwise be released, where he believes that it is not appropriate for him to release that information; and
·
enable state, territory and local government bodies access to ABN information through the same mechanism as the Commonwealth.

Context of reform

4.2 The ABN Act was enacted to put in place a unique identifier system so that businesses can identify themselves reliably:

·
in all their dealings with the Australian Government;
·
for all other Commonwealth purposes;
·
eventually, for all dealings with state, territory and local government bodies; and
·
in their dealings with other businesses and the public.

4.3 This measure is designed to address some concerns which have been expressed about having certain personal information entered in the ABR publicly available.

Detailed explanation of new law

Access to ABN information

4.4 Section 26 of the ABN Act is replaced with new section 26 to limit public access to details contained in the ABR [Schedule 4C, item 2] . The limited information available to the public is:

·
the entity's name;
·
the entity's ABN;
·
the date of effect of the registration;
·
either the business name registered for the entity under the law of a state or territory, or if a business name is not registered for the entity, any name used for business purposes by the entity;
·
the date of effect of any GST registration under section 25-10 of the GST Act;
·
the date of effect of any GST cancellation under section 25-60 of the GST Act;
·
any statement required to be entered in the ABR in relation to the entity under section 30-229 of the ITAA 1997 (e.g. whether the entity, or a fund it operates, is a deductible gift recipient);
·
the entity's Australian Company Number and Australian Registered Body Number (if any);
·
the kind of entity;
·
the state or territory in which the entity's principal place of business is located, and the postcode relating to the location; and
·
any details prescribed in the ABN regulations for the purposes of this section. (The purpose of this regulation making power is to enable further information to be made available for public access as the ABR develops its whole of government objectives. Any proposed regulation would be made in consultation with the Privacy Commissioner).

[Schedule 4C, item 2, new subsection 26(3)]

4.5 This limitation on public access effectively excludes any personal information of concern to the Privacy Commissioner, other than the personal name of a sole trader. The personal name of a sole trader must remain in all but the most extreme of circumstances if the ABN Act is to achieve its stated objectives.

4.6 This amendment also provides the Registrar with the ability to deny public access to any information, that would otherwise be publicly available, where he is satisfied that it is not appropriate to do so. This discretion would only be used in very limited circumstances. For example, where there was a likelihood of personal danger, the Registrar would be able to remove a complete record or partial details from publicly available information. [Schedule 4C, item 2, new subsection 26(4)]

Evidentiary value of ABR

4.7 Section 27 of the ABN Act sets out how the ABR, or information from the ABR, is to be provided as evidence in a court of law. A new subsection (7) is added to the section to allow the Registrar to limit the information to be provided to that which the Registrar considers appropriate. If the Registrar has limited public access to an entity's details under new section 26 , it would normally be expected that the Registrar would also limit those details when provided to a court. [Schedule 4C, item 3, new subsection 27(7)]

Review of decisions

4.8 New Division 10A is inserted to allow a decision by the Registrar to publicly display a registered entity's details, where the entity had requested that the details not be displayed, to be reviewable by the AAT. [Schedule 4C, item 4, new sections 27A and 27B]

Access to information by state, territory and local governments

4.9 As a consequence of limiting public access to ABR information under new section 26 , state, territory and local governments and their instrumentalities, would no longer be able to obtain sufficient ABN information to carry out their functions. To address this limitation, paragraphs 30(3)(c) and (d) of the ABN Act are amended to entitle state, territory and local government instrumentalities to access ABN information in the same way as the Commonwealth accesses ABN information. [Schedule 4C, items 5, 6 and 8, new subparagraphs 30(3)(c)(vi) to (viii), new subparagraphs 30(3)(d)(iv) to (vi), new paragraphs (c) and (d) of the definition of 'official employment' in section 41]

4.10 Also, the note in section 3 of the ABN Act is updated to reflect that this information is now accessed through section 30. [Schedule 4C, item 1]

Disclosure of information to elected officials

4.11 Subsection 30(4) of the ABN Act ensures that an Agency Minister is not entitled to receive ABR information from the Registrar. The provision preserves the principle that an elected representative such as a minister should not be placed in a position of having access to personal information of a person subject to his or her portfolio.

4.12 Subsection 30(4) is replaced with new subsection 30(4) which also prevents state or territory ministers and elected representatives to local governing bodies from receiving ABR information. [Schedule 4C, item 7]

Transitional

4.13 This provision provides that in spite of the repeal of the original section 26, the Regulations already made for the purposes of subsection 26(1) of the ABN Act, as in force immediately prior to the commencement of new Schedule 4C , continue in force. [Schedule 4C, item 9]

Index

Schedule 2: Consequential and miscellaneous amendments

Bill reference Paragraph no.
Item 88, subsection 16-142(2) 1.44

Schedule 3: PAYG withholding system

Bill reference Paragraph no.
Item 8A, paragraph 12-190(4)(d) 1.43

Schedule 4A: Income tax deductions for GST-related expenditure

Bill reference Paragraph no.
Items 1 to 3, subsections 25-80(1) and 42-168(1) of the ITAA 1997 1.38
Items 4 and 7, subsections 25-80(1) and 42-168(1) 1.39
Item 6, subsections 25-80(1) and 42-168(1) of the ITAA 1997 1.38
Item 9, subsections 25-80(4) and (5) 1.40
Item 9, subsections 25-80(5), 42-170(4) and (5) 1.41
Items 11 and 12, subsections 25-80(1) and 42-168(1) of the ITAA 1997 1.38
Item 12, subsections 25-80(1) and 42-168(1) 1.39
Item 16, subsections 25-80(5), 42-170(4) and (5) 1.41

Schedule 4B: Diesel Fuel Rebate Scheme

Bill reference Paragraph no.
Item 1, subsection 164(5A) 2.6
Item 2, subsection 164(5AAC) 2.6
Item 2, subsection 164(5AAD) 2.7
Item 3, subsection 164(5AA) 2.8
Item 4, paragraph 164(5AA)(b) 2.9
Item 5, subsection 164(5ABA) 2.8
Item 6, subsection 78A(5A) 3.6
Item 7, subsection 78A(5AAC) 3.6
Item 7, subsection 78A(5AAD) 3.7
Item 8, subsection 78A(5AA) 3.8
Item 9, paragraph 78A(5AA)(b) 3.9
Item 10, subsection 78A(5ABA) 3.8

Schedule 4C: Access to ABN information

Bill reference Paragraph no.
Item 1 4.10
Item 2 4.4
Item 2, new subsection 26(3) 4.4
Item 2, new subsection 26(4) 4.6
Item 3, new subsection 27(7) 4.7
Item 4, new sections 27A and 27B 4.8
Item 5, 6 and 8, new paragraphs (c) and (d) of the definition of 'official employment' in section 41 4.9
Item 5, 6 and 8, new subparagraphs 30(3)(c)(vi) to (viii) 4.9
Item 5, 6 and 8, new subparagraphs 30(3)(d)(iv) to (vi) 4.9
Item 7 4.12
Item 9 4.13

Schedule 5: Consequential amendment of Chapter 6 (the Dictionary) of the ITAA 1997

Bill reference Paragraph no.
Items 6 and 7 1.45


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