Income Tax (Rates) Amendment Act (No. 2) 1980
No. 59 of 1980
An Act to amend the law declaring certain rates of income tax
[Assented to 23 May 1980]
BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:
Short title, &c.
1. (1) This Act may be cited as the Income Tax (Rates) Amendment Act (No. 2) 1980.
(2) The Income Tax (Rates) Act 1976 is in this Act referred to as the Principal Act.
Commencement
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Indexation
3. Section 9 of the Principal Act is amended—
(a) by omitting sub-paragraph (iii) of paragraph (c) of sub-section (5) and substituting the following sub-paragraphs:
“(i) the increases in the price paid to manufacturers of stabilized crude petroleum oil in respect of part of the oil that was produced from crude petroleum oil obtained from fields in Australia, being increases that took effect on 17 August 1977 and 1 July 1978, to the extent to which the increases were designed to equate the price so paid for part of that oil to the import parity price;
(ii) the increases in the price paid to manufacturers of stabilized crude petroleum oil in respect of part of the oil that was produced from crude petroleum oil obtained from fields in Australia, being increases that took effect on or after 16 August 1978 and were attributable to increases in the import parity price of stabilized crude petroleum oil as determined under sub-section 77l(2) of the Excise Act 1901;
(iii) increases on or after 1 September 1979 in the cost of health insurance and in the net cost of health services, being increases that resulted from a reduction in the Commonwealth medical benefit; and
(iv) increases on or after 1 September 1979 in public hospital inpatient charges and in the cost of health insurance resulting from such increases.”; and
(b) by adding at the end thereof the following sub-sections:
“(8) For the purposes of the application of sub-section (2) in relation to the year of income commencing on 1 July 1980, the multiplier to be used shall be—
(a) if a factor has not been prescribed in relation to that year of income by regulations made under sub-section (4)—the number (calculated to 3 decimal places) ascertained by increasing by 1 the factor ascertained in accordance with sub-section (3) in relation to that year of income and dividing the result by 2; or
(b) if a factor has been prescribed in relation to that year of income by regulations made under sub-section (4)—the number (calculated to 3 decimal places) ascertained by increasing by 1 that factor prescribed by regulations made under sub-section (4) and dividing the result by 2.
“(9) Where the multiplier ascertained in accordance with paragraph (8)(a) or (8)(b) would, if it were calculated to 4 decimal places, end with a number greater than 4, the multiplier ascertained in accordance with that paragraph shall be taken to be the multiplier calculated to 3 decimal places in accordance with that paragraph and increased by 0.001.”.
Prescribed year
4. The year of income commencing on 1 July 1980 is declared to be a prescribed year of income for the purposes of section 9 of the Income Tax (Rates) Act 1976.
Publication of indexation factor
5. Sub-section 9(6) of the Income Tax (Rates) Act 1976 does not apply in relation to section 4 of this Act but if, on 15 June 1980, there is not in force, in relation to the year of income commencing on 1 July 1980, a regulation made under sub-section 9(4) of the Income Tax (Rates) Act 1976, the Treasurer shall, as soon as practicable after 15 June 1980, cause to be published in the Gazette the factor ascertained in accordance with sub-section 9(3) of that Act in relation to that year of income.
Overview
The Income Tax (Rates) Amendment Act (No. 2) 1980, enacted by the Queen and the Senate and House of Representatives of the Commonwealth of Australia, amends the Income Tax (Rates) Act 1976. This Act was introduced to address the need for adjustments to income tax rates in response to economic changes, particularly relating to increases in the price of crude petroleum oil, import parity price, health insurance costs, and public hospital inpatient charges. The policy objective is to ensure that tax rates are adjusted to reflect economic conditions and maintain the fairness and effectiveness of the taxation system.
The Act specifies the commencement date as the day it receives Royal Assent and introduces indexation provisions to accommodate certain economic changes, including the publication of indexation factors. This legislative amendment reflects a commitment to adjusting income tax rates in alignment with economic shifts, ensuring that the tax system remains responsive to changes in the economic environment.
Scope and Application
The Income Tax (Rates) Amendment Act (No. 2) 1980 amends the law concerning certain rates of income tax, applying specifically to the year of income commencing on 1 July 1980. The Act targets individuals and entities that are subject to income tax under the Income Tax (Rates) Act 1976, primarily affecting taxpayers who may be impacted by the indexation of tax rates due to changes in economic conditions. The geographic reach of the Act is national, as it applies throughout the Commonwealth of Australia. The Act does not explicitly state exclusions or exemptions; however, it specifies particular increases in tax rates that are subject to adjustment, including those related to the price of stabilized crude petroleum oil, health insurance costs, and public hospital charges. The application of the Act extends through subordinate instruments, which may further define the specific regulations and factors for the indexation of tax rates. The Act ensures that the tax rates are updated to reflect changes in economic conditions, thereby maintaining the fairness and relevance of the tax system.
Key Provisions
The Income Tax (Rates) Amendment Act (No. 2) 1980 primarily focuses on amending the Income Tax (Rates) Act 1976 by introducing changes to the indexation of certain income tax rates. The key provisions of the Act are contained in sections 3, 4, and 5. Section 3 amends Section 9 of the Principal Act by modifying the list of factors that can be used to index income tax rates. It replaces existing factors with new ones, specifically those relating to price increases in crude petroleum oil and health services, and introduces new methods for calculating the indexation multiplier for the year of income commencing on 1 July 1980. Section 4 declares the year of income starting on 1 July 1980 as a prescribed year for the purposes of Section 9 of the Principal Act. Section 5 specifies that although the requirement to publish the indexation factor under Section 9(6) of the Principal Act does not apply to Section 4 of this Act, the Treasurer must publish the indexation factor in the Gazette if no regulation has been made by 15 June 1980.
The Act imposes several obligations on the parties it governs. Firstly, it requires the Treasurer to calculate and publish the indexation factor for the year of income commencing on 1 July 1980 if no regulation has been made by 15 June 1980. Secondly, it mandates that the new factors specified in Section 3(a) be used for indexation purposes. These factors include the price increases for certain oil and health services. The Act also requires that the new methods of calculating the indexation multiplier, as outlined in Section 3(b), be applied to the year of income starting on 1 July 1980. These methods involve adjusting the factor ascertained under Section 3(a) in specific ways to arrive at the multiplier.
Breach of the provisions of this Act could result in civil or criminal penalties, although specific offences and penalties are not detailed within the Act itself. Generally, non-compliance with tax laws in Australia can result in penalties such as fines, interest on unpaid taxes, and potential legal action. The maximum penalties would depend on the specific nature of the breach and would be determined under the relevant tax legislation and administrative frameworks. For instance, penalties for tax evasion or fraud could be severe, including substantial fines and imprisonment, whereas penalties for minor administrative errors might be less severe.