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Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1)

Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1)

Administered by Department of Communications and the Arts

Legislation au F2005L00320 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by the Authority of the Australian Communications Authority

Legislative Provisions

This instrument is the Radiocommunications (Receiver licence tax) Amendment Determination 2005 (No. 1) (the Amendment Determination). It amends the Radiocommunications (Receiver licence tax) Determination 2003 (No. 2) (the Determination).

Subsection 7 (1) of the Radiocommunications (Receiver Licence Tax) Act 1983 (the Act) allows the Australian Communications Authority (ACA) to determine the amount of tax in respect of the issue of a receiver licence, the anniversary of a receiver licence coming into force and the holding of a receiver licence.

Background

The Amendment Determination is part of a package of measures designed to reform the radiocommunications licence fee regime. The components of the package are:

Radiocommunications (Transmitter Licence Tax) Amendment Determination 2005 (No. 1);
Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1);
Radiocommunications (Interpretation) Amendment Determination 2005 (No. 1);
Radiocommunications (Charges) Amendment Determination 2005 (No. 1); and
Regulation Impact Statement.

Under the Radiocommunications Act 1992, the ACA is responsible for maintaining an efficient, equitable and transparent system of charging for the use of spectrum. The annual tax levied on apparatus licences allows the ACA to create economic incentives for efficient use of the spectrum. It encourages licensees to use the minimum amount of bandwidth for their needs, to move to less congested bands, and to surrender licences no longer needed.

In its 2002 Radiocommunications Inquiry Report, the Productivity Commission (PC) recommended that the ACA should review the formula that sets the amount of the apparatus licence tax. The PC recommended that the ACA should implement a more transparent and flexible model for calculating the apparatus licence tax, and that, as far as possible, taxes should vary in a continuous rather than discrete fashion.

In response, the Government noted that the ACA would undertake consultations with the Radiocommunications Consultative Council (RCC) about the issues raised by the implementation of the recommendation. In April 2004, a working group of the RCC presented a report to the ACA that recommended changes to the apparatus licence tax formula.

Purpose and Operation

The changes to the apparatus licence tax in the Amendment Determination give effect to recommendations of the PC and the RCC working group about setting apparatus licence fees. The Amendment Determination also continues a program by the ACA of raising taxes for fixed services in bands below 960 MHz, which commenced in 2003 when the minimum level of tax was raised for these licences.

The Amendment Determination amends the taxing regime for radiocommunications receiver licences to:

allow taxes to vary continuously with bandwidth;
introduce a remote density area;
update relative tax levels between different locations and frequency bands to reflect current spectrum usage and levels of demand;
raise taxes for fixed services in bands below 960 MHz

- fixed licences in bands below 960 MHz will be subject to a tax rise that will take them 20% of the way towards the equivalent tax currently levied on land mobile licences in the same bands; and

adjust all taxes by a 2.5% CPI adjustment based on the annual CPI movement to June 2004

- this annual adjustment keeps licence fees constant in real terms.

Impact and Effect

The Amendment Determination will enhance the efficiency and equity of the taxing regime. It rewards licensees who make efficient use of the spectrum and makes charging more equitable by eliminating any cross-subsidisation between users. Introducing a remote density geographic area into the fee formula allows a lower level of tax to be charged in areas where demand for all bands is very low, which will offer further encouragement for the delivery of services using spectrum in remote areas.

As a result of the changes, some licensees will face higher fees and some lower fees. This is a necessary consequence of the realignment to improve the equity and efficiency of the fee model. These changes have been designed to be large enough to be effective but not excessive for any company, group or individual.

Attachment 2 contains the Regulation Impact Statement (RIS) for the apparatus licence fee adjustments. It has been approved by the Office of Regulation Review (reference: 3876). The RIS contains details of the impacts and effect of the Amendment Determination.

Consultation

Details of consultation undertaken in relation to the Amendment Determination are discussed in the RIS and the Office of Regulation Review has approved the consultation process.

Briefly, most of the amendments to the tax regime given effect by the Amendment Determination arose from a working group of an industry consultative committee. Other amendments relate to fixed licences below 960MHz. When fees for these licences were increased in 2003, the ACA wrote to all affected licensees stating the reason for the increase and advising that further increases would be implemented.

Detailed description of the Amendment Determination

Details of the Amendment Determination are in Attachment 1.

ATTACHMENT 1

Notes on the instrument

Section 1 Name of Determination

Section 1 provides the citation of the Amendment Determination.

Section 2 Commencement

Section 2 provides for the commencement of the Amendment Determination.

Section 3 Amendment of Radiocommunications (Receiver Licence Tax) Determination 2003 (No. 2)

Section 3 provides that Schedule 1 of the Amendment Determination amends the Radiocommunications (Receiver Licence Tax) Determination 2003 (No. 2).

Schedule 1 Amendments

Item 1

Part 2 of the Determination has been amended to change references to the schedules as Schedule 2 has been deleted, and Schedules 3 and 4 renumbered as Schedule 2 and Schedule 3.

Item 2

Item 2 sets out the transitional arrangements for the Amendment Determination. Although the Amendment Determination commences on the day after registration, in some instances where the tax is payable after this date, the amount of tax will continue to be based on the Radiocommunications (Receiver Licence Tax) Determination 2003 (No. 2) as in force immediately before the commencement of the Amendment Determination. The purpose of these transitional arrangements is to allow the amount of tax shown on renewal notices and instalment notices sent out prior to the commencement of the Amendment Determination, but payable after the commencement of the Amendment Determination, to continue to be valid.

Item 3

Item 3 defines the four geographic areas that make up the low density area.

Item 4

Item 4 defines the low density area.

Item 5

Item 5 defines the remote density area.

Item 6

Item 6 omits Schedule 2. Schedule 2 contained general tax tables, which were used by each part of Schedule 3 to calculate the tax for different licensing options. Schedule 2 is no longer needed because each part of Schedule 3 now contains its own tax tables.

Item 7

Item 7 amends the heading of Schedule 3 so that it refers to the correct clause in subsection 2.1, which were renumbered because of the omission of Schedule 2.

Item 8

Item 8 specifies how to work out the annual amount of tax for different licensing options. The amount of tax varies with frequency range and density, and is proportional to the amount of bandwidth of the spectrum access. The minimum tax amount is $29.39.

Item 9

Item 9 renumbers Schedule 3 as Schedule 2.

Item 10

Item 10 amends the heading of Schedule 3 so that it refers to the correct clause in subsection 2.1, which were renumbered because of the omission of Schedule 2.

Item 11

Item 11 substitutes items 103 to 105 of schedule 4. These items specify how to work out the amount of tax for different periods; and, for multiyear licences, how to work out tax when paying upfront or paying by instalments. The effect of the change is to make the minimum amount of tax payable always $29.39. (Previously the minimum amount of tax varied with frequency range and density area for fixed receive stations.)

Item 12

Item 27 renumbers Schedule 4 as Schedule 3.

Item 13

Item 13 replaces the Dictionary.

Overview

The Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1) was enacted by the Australian Communications Authority (ACA) to amend the Radiocommunications (Receiver Licence Tax) Determination 2003 (No. 2). This legislation responds to the recommendations of the Productivity Commission and the Radiocommunications Consultative Council, aiming to reform the radiocommunications licence fee regime by implementing a more transparent and flexible model for calculating apparatus licence taxes. The policy objective of this determination is to enhance the efficiency and equity of the taxing regime, encouraging licensees to make efficient use of the spectrum while also ensuring that the charging system is equitable and avoids cross-subsidisation between users. The Amendment Determination introduces several key changes to the taxing regime for radiocommunications receiver licences, including allowing taxes to vary continuously with bandwidth, introducing a remote density area, updating relative tax levels to reflect current spectrum usage and demand, raising taxes for fixed services in bands below 960 MHz, and adjusting all taxes by a 2.5% Consumer Price Index (CPI) based on the annual CPI movement to June 2004. These changes aim to improve the efficiency and equity of the fee model, ensuring that the tax regime rewards efficient spectrum use and is fair across different users.

Scope and Application

The Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1) applies to entities holding a receiver licence under the Radiocommunications (Receiver Licence Tax) Act 1983, which encompasses a broad range of industries that rely on the use of radiocommunications spectrum. The Amendment Determination modifies the tax rates and the method of calculating taxes for these licences, impacting the cost for licensees who use spectrum for various purposes such as broadcasting, telecommunications, and other radio services. This Amendment Determination is applicable nationally across Australia, as it falls under the Commonwealth jurisdiction, thereby affecting entities regardless of the state or territory in which they operate. The determination does not include explicit exclusions, but it does provide for a minimum tax amount of $29.39, which applies to all licensing options irrespective of the frequency range and density area for fixed receive stations. The Amendment Determination extends the application of the Act through subordinate instruments, ensuring that the changes to the taxing regime are implemented consistently and effectively across all relevant entities.

Key Provisions

The Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1) amends the Radiocommunications (Receiver Licence Tax) Determination 2003 (No. 2) and introduces several key changes to the taxing regime for radiocommunications receiver licences. The primary amendments are aimed at improving the efficiency and equity of the fee structure, allowing taxes to vary continuously with bandwidth, introducing a remote density area, updating relative tax levels between different locations and frequency bands, raising taxes for fixed services in bands below 960 MHz, and adjusting all taxes by a 2.5% CPI adjustment to maintain fees in real terms. These changes reflect recommendations from the Productivity Commission and the Radiocommunications Consultative Council, and they seek to encourage efficient use of spectrum and equitable charging. Under the amended regime, parties and entities subject to these provisions must adhere to the new tax calculation methods that vary based on frequency range, density, and the amount of bandwidth of spectrum access. The minimum tax amount has been set at $29.39, ensuring a consistent baseline across all licensing options. The Amendment Determination also introduces geographic distinctions, such as low density and remote density areas, which affect the tax levels charged. These amendments require licensees to accurately calculate and pay taxes in accordance with the new schedules and tables provided within the amended Determination. The Amendment Determination outlines specific offences and penalties for non-compliance with the new tax regulations. Parties that fail to comply with the requirements may face civil consequences, including financial penalties. Although the exact penalties are not specified in the document, the nature of non-compliance suggests that enforcement mechanisms are in place to ensure adherence to the new tax framework. Failure to remit the correct tax amount as per the amended schedules may result in the Australian Communications Authority taking corrective action, which could include financial penalties or other administrative measures. In summary, the Radiocommunications (Receiver Licence Tax) Amendment Determination 2005 (No. 1) introduces significant changes to the taxing regime for radiocommunications receiver licences, aiming to enhance efficiency and equity. These changes necessitate careful adherence to the new tax calculation methods by all affected parties, with potential civil consequences for non-compliance. The new framework ensures that the tax remains constant in real terms and encourages efficient use of spectrum across different geographic areas and frequency bands.

Area of Law: Taxation Law
Instrument: Regulation
Concepts: Definitions & Interpretation; Commencement Provisions; Regulatory Standards; Enforcement Powers

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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