EXPLANATORY STATEMENT
STATUTORY RULES 1990 No. 19
Issued By The Authority Of The Treasurer
INCOME TAX ASSESSMENT ACT 1936
INCOME TAX REGULATIONS (AMENDMENT)
The purpose of this regulation which amended the Income Tax Regulations (the Regulations) is to prescribe an area outside Australia as a special area for the purposes of section 23AC of the Income Tax Assessment Act 1936 (the Act) by reason of a state of disturbance in or affecting Namibia.
Section 23AC of the Act provides an exemption from income tax for the pay and allowances earned by Australian Defence Force personnel during their service in a special area.
The period of special service in respect of which the income tax exemption is given is set out in subsection 23AC(3). Broadly stated, the exemption of pay and allowances commences when a Defence Force member leaves Australia for service in the special area and ordinarily concludes when the member returns to Australia.
Subsection 23AC(4) authorises the making of a regulation to prescribe that on a specified date, an area outside Australia has become a special area for the purposes of section 23AC by reason of a state of disturbance in or affecting Namibia. In respect of the specified date, subsection 23AC(4) provides that the date may be a date before the commencement of the regulations or before the commencement of the subsection (19 December 1989) but not before 18 February 1989.
18 February 1989 is the date the first Defence Force member left Australia en route to Namibia for service as a member of the United Nations Transition Assistance Group.
New regulation 4ACA of the Regulations provides that by reason of a state of disturbance in or affecting Namibia, the area comprising the United Nations Mandated Territory of Namibia and the area of land extending 400 kilometres outwards from the borders of Namibia into the adjoining countries of Angola, Zambia, Zimbabwe, Botswana and South Africa (including Walvis Bay) is to be taken to have become a special area for the purpose of section 23AC of the Act on 18 February 1989. The area prescribed is the area declared in the Veterans’ Entitlements Act 1986 as the qualifying area of service for members of the Transition Assistance Group for the purpose of eligibility for pensions and associated benefits and allowances under that Act.