Summary

The Revenue Legislation Amendment Bill 2003 (No 2) (the Bill) is an omnibus Bill that amends the Duties Act 1999 (the Duties Act) and the Gaming Machine Act 1987 (the Gaming Act). The Bill provides the legislative basis for Revenue Initiatives announced in Budget 2003-04.

In brief, the Bill:

♦ removes the current exemption allowed under the Duties Act for corporate reconstruction transactions and replaces it with a concession whereby 5% of the duty assessed is payable. The eligible parties and the types of transactions are unchanged; and

♦ increases the top marginal gaming machine tax rate by 2% from 25.0% to 27.0%. This limits the effect of the measure to those clubs with the most capacity to pay, i.e. those clubs with gross gaming machine revenue in excess of $600,000 per annum.

The proposed commencement date for the amending Act is 1 July 2003.

Revenue Implications

This Bill will have direct revenue implications estimated to raise $4.1m additional revenue in 2003-04 as follows:
♦ concessional duty for corporate reconstruction transactions: $1.1m; and
♦ increasing gaming machine tax rate: $3m.


Details of the Bill are attached.

Clause 1 Name of Act
This Act is the Revenue Legislation Amendment Act 2003 (No 2).

This Act commences on 1 July 2003.

This Act amends the Duties Act 1999.

Clause 4 New section 70A is inserted.

70A Corporate reconstructions - concessional duty for dutiable transactions
The provisions of this clause apply to a dutiable transaction if property is transferred (or agreed to be transferred) by a member of a group of corporations to another member of the same group, or is vested in a member of the group (and it was owned by a member of the same group immediately before the vesting). For this section, a corporation includes a unit trust scheme.

The duty payable for the transaction is 5% of the amount that would be payable apart from this provision. Minimum duty of $20 applies under section 229 of the Duties Act.

The 5% duty only applies if the transaction is approved by the commissioner in accordance with written guidelines determined by the Minister. The guidelines are a disallowable instrument and the approval may be subject to conditions.

These provisions effectively convert the corporate reconstruction exemption omitted in clause 9 of this bill to a concession, but the eligibility criteria are unchanged.

Clause 5 New section 91A is inserted.

91A Corporate reconstructions - concessional duty for relevant acquisitions

This clause repeats the provisions in section 70A to allow concessional duty of 5% to apply to the making of a relevant acquisition (section 86).

These provisions effectively convert the corporate reconstruction exemption omitted in clause 9 of this bill to a concession, but the eligibility criteria are unchanged.

Clause 6 Rate of duty - Section 208 (1)
The rate of duty is payable at the determined rate subject to subsection (2) and section 208AA. This allows concessional duty of 5% of the duty otherwise payable if the provisions of s208AA are met.

Clause 7 New section 208AA is inserted in Part 9.1

208AA Corporate reconstructions - concessional duty for motor vehicle
registration applications
The provisions of this clause apply to the application to register a motor vehicle if the application is made by a member of a group of corporations and immediately before the application, the vehicle was registered in the name of another member of the same group. A corporation includes a unit trust scheme.

The duty payable for the transaction is 5% of the amount that would be payable apart from this provision. Minimum duty of $20 applies under section 229 of the Duties Act.

The 5% duty only applies if the transaction is approved by the commissioner in accordance with written guidelines determined by the Minister. The guidelines are a disallowable instrument and the approval may be subject to conditions.

These provisions effectively convert the corporate reconstruction exemption omitted in clause 9 of this bill to a concession, but the eligibility criteria are unchanged.

Clause 8 Corporate reconstructions – exemptions – Section 232
The omission of section 232 removes the exemption for corporate reconstruction.

Clause 9 Objections and review of decisions
New section 252 (1) (ea) and (eb)
The insertion of new sections 252 (1) (ea) and (eb) allow a taxpayer to object under the Taxation Administration Act to the commissioner’s decision to impose a condition on the approval for concessional duty to be paid on a dutiable transaction (s70A) or a relevant acquisition (s91A), respectively.

Clause 10 Insert New section 252 (1) (sa)
The insertion of a new section 252 (1) (sa) allows a taxpayer to object under the Taxation Administration Act to the commissioner’s decision to impose a condition on the approval for concessional duty to be paid on the application to register a motor vehicle.

Clause 11 Section 252 (1) (y)
This clause makes s252 (1) (y) the final subsection in the provision.

Clause 12 Section 252 (1) (z)
This subsection is omitted. Objection rights are no longer necessary as the section to which it refers has been omitted.

Clause 13 Section 252 (1)
This section renumbers paragraphs when the Act next is republished under the Legislation Act 2001.

Part 3 Gaming Machine Act 1987

Clause 14 Act amended - pt 3
This part amends the Gaming Machine Act 1987.

Clause 15 Definitions for Act
Section 4, definition of prescribed percentage, paragraph (b) (iv)
This clause amends paragraph (b)(iv) of the definition of prescribed percentage by substituting a new prescribed percentage in relation to that part of gross gaming machine revenue that exceeds $50,000 per month of 27%.