House of Representatives

Taxation Laws Amendment Bill (No. 5) 1989

Taxation Laws Amendment Act (No. 5) 1989

Explanatory Memorandum

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


The changes to the system of collection of tax from companies, certain unit trusts taxed as companies, approved deposit funds, superannuation funds and pooled superannuation trusts are estimated to produce a revenue gain of $880 million in 1989-90 and $150 million in 1990-91.

The cost to revenue of the amendment allowing deductions for costs in ascertaining and meeting taxpayers' income tax obligations is estimated to be $40 million per annum commencing in 1990-91.

The estimated revenue cost of allowing a deduction to life assurance companies for expenditure incurred in gaining the investment component of certain life insurance premium income is nil in 1989-90 and 1990-91, $30m in 1991-92, $125m in 1992-93 and $140m in 1993-94.

The change to the imputation system to deal with share-based financing arrangements will prevent an unquantifiable loss of revenue.

The nature of the proposal to extend the time allowed for restoration of deposits in certain approved deposit funds does not permit a reliable estimate of the potential revenue effect.

The amendment which relates to taxable contributions of complying superannuation funds will ensure the protection of the revenue base of the tax on superannuation contributions.

The revenue cost of extending the income tax gift provisions to building funds for hostel accommodation for school students from rural areas is estimated to be less than $500,000 in a full financial year while the changes to the owner builder provisions of the prescribed payments system will have no effect on revenue.

The reduction in the rate of withholding from certain withdrawals from film accounts will have a negligible revenue effect.

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