Explanatory Memorandum
(Circulated by authority of the Treasurer, the Rt. Hon. William McMahon).Introductory Note
The main features of this Bill are -
Calls Paid on Shares in Mining and Prospecting Companies (Clauses 11 and 12).
The deductions now allowable for one-third of calls paid on shares in mining or prospecting companies will be available in respect of future share issues only where the moneys are expended by the company in exploration or prospecting but will have effect in respect of all minerals obtained by mining operations instead of, as at present, only gold, silver, base metals, rare minerals and oil. Calls paid on redeemable shares (whenever issued) will not in future be eligible for the deduction.
Mining Leases (Clause 16).
The option that is at present available for parties to the grant, assignment or surrender of a mining lease to elect to have the lease provisions applied in relation to a premium or expenditure on leasehold improvements is to be withdrawn as from the date of introduction of the Bill. Mining leases will thus be placed in the same position as leases generally. Special provisions will, in most circumstances, preserve an entitlement to exercise the option in respect of a current mining lease.
Capital Expenditure on Prospecting and Mining (Clause 17).
The provisions governing the allowance of special deductions for capital expenditure incurred in prospecting and mining (other than for petroleum) are being expressed with more precision so as to describe those classes of expenditure that fall within the scope of the provisions and those that are excluded from them. The operation of these new provisions is modified by other provisions the broad aim of which is to preserve any existing entitlement of taxpayers to deductions under the present law in relation to expenditure incurred or contracted for on or before the date of introduction of the Bill - Clause 21.
Transport of Minerals (Clause 17).
Expenditure incurred on a railway, road, pipe-line or other facility used primarily and principally for the transport of minerals (other than petroleum) mined in Australia or the Territory of Papua and New Guinea, and products of such minerals, will be deductible in equal annual instalments over ten years. This allowance will not be available in respect of railway rolling stock, road vehicles, ships or port facilities.
Uranium Mining (Clause 22).
The exemption of income from uranium mining and treatment operations will expire at the end of the 1967-68 income year and it is not proposed to continue it. A transitional provision will permit certain capital expenditure incurred in connection with the uranium mining operations during the exempt period to be deducted from assessable income derived from future mining operations.
The following notes relate to each clause of the Bill.