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House of Representatives

Income Tax (Arrangements with the States) Repeal Bill 1989

Income Tax (Arrangements with the States) Repeal Act 1989

Explanatory Memorandum

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


The purpose of this Bill, which will have no effect on revenue, is to repeal the Income Tax (Arrangements with the States) Act 1978.

This Act was designed to facilitate the introduction by the States of their own personal income tax laws. If such laws met the criteria set out in the Act, the Commissioner of Taxation was authorised to administer them on behalf of the States. As a State wishing to participate in this arrangement would be required to assign to the Commonwealth the right of collection of the State tax debt, the Act provided for a merged collection of Commonwealth and State taxes. The legislative scheme envisaged that some States might have chosen to grant a rebate of income tax rather than levy one. Any rebate allowed was to be at the expense of such a State.

The criteria set out in the Act required that the relevant income tax laws be limited to individuals resident in the State, and that the tax or rebate applicable to each resident person be expressed as a single flat percentage of the ordinary Commonwealth income tax payable by that person.

No State has enacted legislation to give effect to this arrangement.

This Bill will repeal the Income Tax (Arrangements with the States) Act 1978, and make a number of consequential amendments to the Income Tax Assessment Act 1936.

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