Taxation Administration Act 1953 – Provision of further time for lodgment of the 2013 Minerals Resource Rent Tax (MRRT) Return – Low volume non payers’ Instrument (No. 1) 2013

Explanatory Statement

General Outline of Instrument

1. This instrument is made under paragraph 117‑5(5)(a) of Schedule 1 to the Taxation Administration Act 1953 (TAA).
2. The instrument gives entities that are required to lodge an MRRT return for the 2013 MRRT year until 1 December 2014 to lodge that MRRT return if:

• they did not pay[1] an MRRT instalment in respect of any instalment quarter during the 2013 MRRT year, and
• they were not a major producer as defined in the legislative instrument for the 2013 MRRT year

3.      The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Date of effect

4.      The instrument commences on the day after its registration.

What is this instrument about:

5.      The purpose of the instrument is to allow entities that are covered by it further time to lodge their 2013 MRRT return in light of the announcement to repeal the MRRT law with effect from 1 July 2014.

What is the effect of this instrument:

6.      The effect of this instrument is that entities covered by the instrument are not required to lodge their 2013 MRRT return until 1 December 2014.

7.      If Parliament repeals the MRRT with effect from 1 July 2014, the Commissioner will move to exempt entities covered by this instrument from having to lodge 2013 returns because he would have no ongoing need for the information contained in them. This instrument defers the due date for lodgment for entities covered by this instrument and so defers compliance costs in return preparation which may ultimately not need to be incurred if the legislation is repealed and the Commissioner exempts the entities from having to lodge.

8.      Compliance cost impact: Low. An assessment of the compliance cost impact indicates that the impact will result in a low overall impact, comprising a low implementation impact and a low decrease in ongoing compliance costs.

Background:

9.      Paragraph 117‑5(5)(a) of Schedule 1 to the TAA provides that the Commissioner may, by legislative instrument, determine a further period within which a class of entities may provide an MRRT return for an MRRT year.

10.  Returns are an integral part of the administration of taxes that are self‑assessed as they enable entities to inform the Commissioner of their liability to pay MRRT for the MRRT year. While a taxpayer may not be liable to pay MRRT in a particular year, the information contained in the return is important to the Commissioner to inform the Commissioner about that entity. This enables the Commissioner to make administrative decisions, both in relation to the entity itself and more generally about the current and future administration of the tax.

11.  However it is also recognised that the requirement to prepare and lodge MRRT returns has an impact on compliance costs for entities.

12.  The government announced in the Treasurer’s Press Release, dated 24 October 2013, that it proposes to repeal the MRRT law with effect from 1 July 2014. If legislation to this effect is passed by Parliament, the MRRT will not have an ongoing operation.

13.  To simplify administrative requirements and to make participation in the tax and superannuation systems as easy and seamless as possible, the Commissioner will allow entities covered by this instrument further time to lodge their 2013 MRRT return. This approach aims to ease the costs of compliance for taxpayers who are unlikely to be liable to pay MRRT.

Consultation:

14.  Consultation occurred with the Resource Rent Tax Working Group. The working group’s membership includes representatives of the major tax, law and accounting associations, representatives of resource industry associations and the ATO.

15.  Wider consultation was not considered necessary given the scope of this instrument, that is it applies to entities who are members of the mining industry, its impact and that it is providing a concession.

Legislative references:

Minerals Resource Rent Tax Act 2012

Taxation Administration Act 1953

Human Rights (Parliamentary Scrutiny) Act 2011

Legislative Instruments Act 2003

Statement of compatibility with human rights

This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Taxation Administration Act 1953 – Provision of further time for lodgment of the 2013 Minerals Resource Rent Tax (MRRT) Return – Low volume non‑payers’ Instrument (No.1) 2013

This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of this instrument

This instrument is made under paragraph 117‑5(5)(a) of Schedule 1 to the Taxation Administration Act 1953 (TAA).

The instrument gives entities that are required to lodge an MRRT return for the 2013 MRRT year until 1 December 2014 to lodge that MRRT return if:

• they did not pay an MRRT instalment in respect of any instalment quarter during the 2013 MRRT year, and
• they were not a major producer as defined in this legislative instrument for the 2013 MRRT year

The government announced in the Treasurer’s Press Release, dated 24 October 2013, that it proposes to repeal the MRRT law with effect from 1 July 2014.

Consultation has been undertaken in determining the further time to allow relevant entities to lodge their 2013 MRRT return.

Human rights implications

This instrument does not engage any of the applicable rights or freedoms as its purpose is to provide for further time for entities to comply with an administrative obligation and is machinery in nature.

Conclusion

This instrument is compatible with human rights as it does not raise any human rights issues.

[1] The payment of an MRRT instalment requires an entity to pay an amount of money to the Commissioner. An instalment is paid even if the amount concerned is subsequently refunded. A liability to pay an MRRT instalment of a nil amount is not the payment of an MRRT instalment.