EXPLANATORY STATEMENT
STATUTORY RULES 1982 NO. 115
ISSUED BY THE AUTHORITY OF THE TREASURER
These regulations amend regulations 54A and 54DAA of the Income Tax Regulations to provide for the new zone allowance arrangements to be reflected in the rates at which PAYE tax instalments are to be deducted from an employee’s salary or wages, where the employee has lodged with his employer a declaration for PAYE purposes and the salary or wages are paid in the zone areas.
The new arrangements were given effect by amendments made to the Income Tax Assessment Act 1936 by the Income Tax Assessment Amendment Act 1982 (Act No. 29 1982), which received the Royal Assent on 17 May 1982. Under those arrangements, the basic zone rebates ($216 and $36 for Zone A and Zone B respectively) remain unchanged but the part of the rebate that is related to dependants has been increased from 25 per cent to 50 per cent of the relevant dependant rebate amounts for Zone A and from 4 per cent to 20 per cent for Zone B. In addition, a special basic rebate of $750, in lieu of the ordinary basic rebate for each zone, has been introduced for people residing or spending the required period of time in particularly isolated areas.
Regulation 1 includes in regulation 54A definitions of new terms used in amended regulation 54DAA. It defines Zone A, Zone B and the special area within Zone A or Zone B by reference to the meaning of those terms in section 79A of the Income Tax Assessment Act. In terms of that section, Zone A means the area described in Part I of Schedule 2 to the Assessment Act and Zone B means the area described in Part II of that Schedule, while the special area within Zone A or Zone B is constituted by the points within that Zone that are in excess of 250 kilometres by the shortest practicable surface route from the centre point of the nearest urban centre with a population of 2,500 or more.
Regulation 2 amends regulation 54DAA to provide for appropriate reductions in the tax instalments that would otherwise be deducted by an employer from salary or wages paid in a zone area to an employee who has lodged with the employer a declaration for PAYE purposes. The amount of the appropriate deduction - which is the weekly equivalent of the basic zone rebate and of the relevant percentage of any rebates for dependants - depends upon the particular zone area in which the employee is paid and upon the rebate claims in respect of dependants made by the employee in the declaration.
Paragraphs (a), (b) and (c) of regulation 2 amend sub-regulation 54DAA(1) to provide that, where an employee is paid in the special area within Zone A, the amount of the instalment that would otherwise be deducted from the employee’s weekly earnings is to be reduced by $14.40 if the employee has not claimed any dependant rebate or zone dependant rebate, and by $14.40 plus 24 cents for each whole $25 of dependant rebates and/or zone dependant rebates claimed, rounded to the nearest 5 cents.
Paragraphs (d), (e) and (f) amend sub-regulation 54DAA(2) to provide that, where an employee is paid in the special area within Zone B, the weekly instalment otherwise deducted is to be reduced by $14.40 if the employee has not claimed a dependant rebate or zone dependant rebate, and by $14.40 plus 10 cents for each whole $25 of dependant and/or zone dependant rebates claimed, rounded to the nearest 5 cents.
Paragraph (g) inserts new sub-regulation 54DAA(3), which applies where an employee is paid in Zone A but not in the special area within Zone A and provides that the amount of the instalment that would otherwise be deducted is to be reduced by $4.15 if the employee has not claimed a dependant or zone dependant rebate, and by $4.15 plus 24 cents for each whole $25 of dependant and/or zone dependant rebates claimed, rounded to the nearest 5 cents.
Paragraph (h) inserts new sub-regulation 54DAA(4), which applies where an employee is paid in Zone B but not in a special area within Zone B and provides that the instalment otherwise deducted is to be reduced by 70 cents if the employee has not claimed a dependant or zone dependant rebate, and by 70 cents plus 10 cents for each whole $25 of dependant and/or zone dependant rebates claimed, rounded to the nearest 5 cents.