House of Representatives

Taxation Laws Amendment Bill (No. 2) 1990

Taxation Laws Amendment Act (No. 2) 1990

Explanatory Memorandum



The estimated cost of increasing the pensioner rebate of tax is $150 million in 1989-90 and $150 million in 1990-91.

The estimated gain to revenue from the changes to the beneficiary rebates of tax is $12 million in 1990-91.

The revenue cost of allowing concessions to prescribed persons in respect of their half Medicare levy liability is estimated to be $2 million in 1989-90 and $4 million in a full year.

The provision of an unrestricted carry-forward period for taxation losses will not result in any revenue cost until the 1998-99 financial year. The cost for that year is estimated to be of the order of $5 million increasing thereafter to a full year annual cost of $20 million.

The cost to the revenue of extending the mining provisions to include quarrying operations is estimated at $10 million in 1990-91 and 1991-92 and is expected to peak at $20 million later in the decade. There will be no cost to revenue in the 1989- 90 year.

The exemption from income tax of certain not-for-profit bodies is estimated to cost $1 million in 1990-91 and each subsequent year.

Taxing of the Australian Wool Testing Authority Ltd is expected to produce revenue gains of up to $1 million per annum.

The revenue savings that will arise under the amendments to prevent dividend streaming arrangements from exploiting the imputation system cannot be quantified but will prevent the potential loss of significant revenue amounts.

The amendments which enable profits from the disposal of contaminated live stock to be spread over 5 years or set off against the cost of replacement stock will cost less than $0.5 million in relation to each of the income years 1987-88 and 1988-89; most of the cost will be recouped in subsequent years.

The revenue cost of the amendment to extend the income tax gift provisions to admit the Borneo Memorials Trust Fund and the Guadalcanal and Solomon Islands War Memorial Foundation is estimated to be $35,000 and $15,000 respectively in a full financial year. Deductions for gifts to Australian Vietnam Forces Welcome Home '87 Pty Limited will cost about $500,000 in the 1990/91 financial year.

The revenue cost of gifts to a company that conducts life education programs under the auspices of the Life Education Centre is expected to be $200,000 in a full financial year. There is no cost in specifically listing the Life Education Centre in the gift provisions as the centre is currently treated as a public benevolent institution under those provisions.

The proposed sales tax exemptions for uncut gems and imported coins is estimated to cost $3 million in a full year.

Other amendments proposed by the Bill will have a negligible revenue impact.

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