Taxation (Deficit Reduction) Act (No. 2) 1993

Administered by Department of the Treasury

Legislation au C2004A04610 Not in force Act

Legislation content

Taxation (Deficit Reduction) Act (No. 2) 1993

Act No. 55 of 1993 as amended

This compilation was prepared on 1 July 2000
taking into account amendments up to Act No. 58 of 2000

The text of any of those amendments not in force
on that date is appended in the Notes section

Prepared by the Office of Legislative Drafting,
Attorney-General’s Department, Canberra

 

 

 

Contents

Part 1—Preliminary

1 Short title [see Note 1]

2 Commencement [see Note 1]

Part 2—Amendment of the Fringe Benefits Tax Act 1986 to give effect to an increase in the rate of FBT

3 Object of Part

4 Principal Act

5 Rate of tax

6 Application of amendments

Part 3—Amendment of the Income Tax Assessment Act 1936

Division 1—Principal Act

7 Principal Act

Division 2—Amendments to allow deductions to registered organisations for expenditure incurred in gaining the investment component of certain premiums

8 Object of Division

9 Interpretation

10 Insertion of new section

11 Application of amendments

Division 3—Amendments relating to rebates for bonuses received by holders of life assurance policies issued by friendly societies

Subdivision A—Object of Division

12 Object of Division

Subdivision B—Increase for 1995‑96, 1996‑97, 1997‑98, 1998‑99 and 1999‑2000

13 Rebate in respect of amounts assessable under section 26AH

Subdivision D—Increase for 2000‑2001 and later years

15 Rebate in respect of amounts assessable under section 26AH

Part 4—Amendment of the Income Tax Rates Act 1986

Division 1—Principal Act

16 Principal Act

Division 2—Registered organisations

Subdivision A—Preliminary

17 Object of Division

Subdivision B—Rate for 1994‑95, 1995‑96, 1996‑97, 1997‑98, 1998‑99 and 1999‑2000

18 Rates of tax payable by companies

Subdivision C—Rate for 2000‑01 and later years

19 Rates of tax payable by companies

Notes 

 

An Act to amend the law relating to taxation

Part 1—Preliminary

1  Short title [see Note 1]

  This Act may be cited as the Taxation (Deficit Reduction) Act (No. 2) 1993.

2  Commencement [see Note 1]

 (1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

 (2) Subdivision B of Division 3 of Part 3 commences on 1 July 1995.

 (3) Subdivision D of Division 3 of Part 3 commences on 1 July 2000.

 (4) Subdivision C of Division 2 of Part 4 commences on 1 July 2000.


Part 2—Amendment of the Fringe Benefits Tax Act 1986 to give effect to an increase in the rate of FBT

3  Object of Part

  The object of this Part is to increase the rate of fringe benefits tax from 48.25% to 48.4%.

4  Principal Act

  In this Part, Principal Act means the Fringe Benefits Tax Act 1986.

5  Rate of tax

  Section 6 of the Principal Act is amended by omitting “48.25%” and substituting “48.4%”.

6  Application of amendments

  The amendments made by this Part apply to the year of tax beginning on 1 April 1994 and all later years of tax.


Part 3—Amendment of the Income Tax Assessment Act 1936

Division 1—Principal Act

7  Principal Act

  In this Part, Principal Act means the Income Tax Assessment Act 1936.


Division 2—Amendments to allow deductions to registered organisations for expenditure incurred in gaining the investment component of certain premiums

8  Object of Division

  The object of this Division is to allow deductions to registered organisations for expenditure incurred in gaining the investment component of certain premiums.

9  Interpretation

  Section 116E of the Principal Act is amended by inserting the following definitions in subsection (1):

  investment component, in relation to a premium received in respect of a life assurance policy, means so much of the premium as does not consist of a risk component.

  risk component, in relation to a premium received in respect of a life assurance policy, means the risk component (if any) of the premium worked out on the basis specified in the regulations.

10  Insertion of new section

  After section 116HA of the Principal Act the following section is inserted:

116HAA  Deductions to be allowable for expenditure incurred in gaining the investment component of certain premiums

Premiums to which section applies

 (1) This section applies to premiums received in respect of life assurance policies other than:

 (a) superannuation premiums; or

 (b) premiums received in respect of eligible policies; or

 (c) specified roll-over amounts; or

 (d) premiums exempt from tax under section 23AH.

Assumption to be made in determining allowable deductions

 (2) For the purposes of determining the deductions allowable to a registered organization, the investment component of a premium to which this section applies is to be treated as assessable income.

Actuary’s certificate

 (3)  This section does not apply to premiums derived by a registered organization in a year of income unless the organization obtains a certificate by an authorised actuary with respect to the operation of this section. The certificate must be in a form approved in writing by the Commissioner. The organization must obtain the certificate:

 (a) before the date of lodgment of the organization’s return of income of the year of income; or

 (b) within such further time as the Commissioner allows.

Definition

 (4) In this section:

authorised actuary means a Fellow or an Accredited Member of the Institute of Actuaries of Australia.

11  Application of amendments

  The amendments made by this Division apply in relation to expenditure incurred by a registered organisation on or after 1 July 1994.


Division 3—Amendments relating to rebates for bonuses received by holders of life assurance policies issued by friendly societies

Subdivision A—Object of Division

12  Object of Division

  The object of this Division is to increase the rebates for bonuses paid to holders of life assurance policies issued by friendly societies.

Subdivision B—Increase for 1995‑96, 1996‑97, 1997‑98, 1998‑99 and 1999‑2000

13  Rebate in respect of amounts assessable under section 26AH

 (1) Section 160AAB of the Principal Act is amended by omitting “30%” from paragraph (a) of the definition of statutory percentage in subsection (1) and substituting “33%”.

 (2) The amendments made by subsection (1) apply to amounts received (within the meaning of section 26AH of the Principal Act) on or after 1 July 1995.

Subdivision D—Increase for 2000‑2001 and later years

15  Rebate in respect of amounts assessable under section 26AH

 (1) Section 160AAB of the Principal Act is amended:

 (a) by omitting from subsection (1) the definition of statutory percentage;

 (b) by omitting from subsections (2) to (6) (inclusive) “the statutory percentage” (wherever occurring) and substituting “39%”.

 (2) The amendments made by subsection (1) apply to amounts received (within the meaning of section 26AH of the Principal Act) on or after 1 July 2000.


Part 4—Amendment of the Income Tax Rates Act 1986

Division 1—Principal Act

16  Principal Act

  In this Part, Principal Act means the Income Tax Rates Act 1986.


Division 2—Registered organisations

Subdivision A—Preliminary

17  Object of Division

  The object of this Division is to increase the rate of tax payable by a registered organisation in respect of its eligible insurance business.

Subdivision B—Rate for 1994‑95, 1995‑96, 1996‑97, 1997‑98, 1998‑99 and 1999‑2000

18  Rates of tax payable by companies

 (1) Section 23 of the Principal Act is amended by omitting from paragraph (4)(b) “30%” and substituting “33%”.

 (2) The amendments made by subsection (1) apply to assessments in respect of income of the 1994-95 year of income, of the 1995-96 year of income, of the 1996‑97 year of income, of the 1997‑98 year of income, of the 1998‑99 year of income and of the 1999‑2000 year of income.

Subdivision C—Rate for 2000‑01 and later years

19  Rates of tax payable by companies

 (1) Section 23 of the Principal Act is amended by omitting from paragraph (4)(b) “33%” and substituting “39%”.

 (2) The amendment made by subsection (1) applies to assessments in respect of income of the 2000‑01 year of income and of all later years of income.

Notes to the Taxation (Deficit Reduction) Act (No. 2) 1993

Note 1

The Taxation (Deficit Reduction) Act (No. 2) 1993 as shown in this compilation comprises Act No. 55, 1993 amended as indicated in the Tables below.

Table of Acts

 

Act

Number
and year

Date
of Assent

Date of commencement

Application, saving or transitional provisions

 

Taxation (Deficit Reduction) Act (No. 2) 1993

55, 1993

27 Oct 1993

S. 13: 1 July 1995
Ss. 15 and 19: 1 July 2000  Remainder: Royal Assent

 

Taxation Laws Amendment (Budget Measures) Act 1995

94, 1995

27 July 1995

Schedule 3 (Part 2 (items 5, 6)): 1 July 1995
Schedule 9: Royal Assent
Remainder: 9 May 1995

—

Taxation Laws Amendment Act (No. 4) 1997

174, 1997

21 Nov 1997

Schedule 8: 1 July 1997
Remainder: Royal Assent

—

Taxation Laws Amendment Act (No. 2) 2000

58, 2000

31 May 2000

Schedule 7: Royal Assent (a)

—

 

(a) The Taxation (Deficit Reduction) Act (No. 2) 1993 was amended by Schedule 7 only of the Taxation Laws Amendment Act (No. 2) 2000, subsection 2(1) of which provides as follows:

 (1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

Table of Amendments

ad. = added or inserted      am. = amended      rep. = repealed      rs. = repealed and substituted

Provision affected

How affected

S. 2....................

am. No. 94, 1995; No. 174, 1997; No. 58, 2000

Heading to Subdiv. B of......
Div. 3 of Part 3

am. No. 94, 1995

rs. No. 174, 1997

 

 

Subdiv. C of Div. 3 of.......

Part 3 (s. 14)

rep. No. 94, 1995

S. 14...................

rep. No. 94, 1995

Heading to Subdiv. D of .....
Div. 3 of Part 3

rs. No. 174, 1997

S. 15...................

am. No. 174, 1997

Heading to Subdiv. B of......
Div. 2 of Part 4

am. No. 94, 1995

rs. No. 174, 1997; No. 58, 2000

 

 

S. 18...................

am. No. 94, 1995; No. 174, 1997; No. 58, 2000

Heading to Subdiv. C of.....
Div. 2 of Part 4

rs. No. 174, 1997; No. 58, 2000

Subdiv. C of Div. 2 of.......

Part 4 (s. 19)

rs. No. 94, 1995

S. 19...................

rs. No. 94, 1995

am. No. 174, 1997; No. 58, 2000

Subdiv. D of Div. 2 of .......

Part 4 (s. 20)

rep. No. 94, 1995

S. 20...................

rep. No. 94, 1995

 

Overview

The Taxation (Deficit Reduction) Act (No. 2) 1993, enacted by the Commonwealth Parliament, was introduced to address fiscal deficits by amending various taxation laws. This Act primarily focuses on modifying rates and rebates under the Fringe Benefits Tax Act 1986, the Income Tax Assessment Act 1936, and the Income Tax Rates Act 1986. The policy objective behind these amendments was to generate additional revenue to help reduce the budget deficit through adjustments to tax rates and rebates. The Act's provisions include increasing the fringe benefits tax rate, allowing deductions for certain investment premiums for registered organisations, enhancing rebates for bonuses from life assurance policies, and adjusting tax rates for registered organisations involved in eligible insurance business.

Scope and Application

The Taxation (Deficit Reduction) Act (No. 2) 1993, as amended, applies to various taxation laws within Australia and amends the Fringe Benefits Tax Act 1986, the Income Tax Assessment Act 1936, and the Income Tax Rates Act 1986 to implement changes in taxation rates and deductions. These amendments affect entities and individuals subject to the tax provisions outlined in these Acts, including registered organisations, companies, and holders of life assurance policies. The Act’s provisions primarily impact financial transactions and conduct related to fringe benefits, income tax assessments, and tax rates. The amendments apply nationally and include specific provisions for certain years, such as 1995-96 and later years, with particular rates and deductions effective from July 1995 and July 2000. The Act does not explicitly state any exclusions or exemptions but implies that the changes apply broadly to the specified entities and tax years unless otherwise indicated. Subordinate instruments may further extend or restrict the application of the Act.

Key Provisions

The Taxation (Deficit Reduction) Act (No. 2) 1993 makes significant amendments to several taxation laws with the primary aim of reducing the budget deficit. One of the main sections of the Act, section 5, amends the Fringe Benefits Tax Act 1986 to increase the rate of fringe benefits tax from 48.25% to 48.4%. This change is applicable to the year of tax beginning on 1 April 1994 and all subsequent years of tax, as outlined in section 6. Another notable provision, section 116HAA, inserted into the Income Tax Assessment Act 1936, allows registered organisations to claim deductions for expenditure incurred in gaining the investment component of certain premiums. This section requires the organisation to obtain an actuary’s certificate, in a form approved by the Commissioner, before lodging their income return for the relevant year of income or within any further time allowed by the Commissioner, as stated in section 11. The Act imposes various obligations on the parties it governs. For instance, registered organisations must ensure they obtain the necessary actuary’s certificate before claiming deductions for expenditure related to the investment component of certain premiums. Additionally, section 160AAB of the Income Tax Assessment Act 1936, as amended by the Act, mandates that holders of life assurance policies issued by friendly societies receive increased rebates for bonuses, with the specific percentages and applicable dates detailed in sections 13 and 15. Breaches of the provisions set out in the Act can lead to significant consequences. While the Act itself does not explicitly detail specific penalties for non-compliance, breaches of tax laws generally can result in penalties under the relevant taxation acts. For instance, penalties for incorrect or late lodgement of tax returns can be severe, often involving fines or imprisonment depending on the severity and intent of the breach. The maximum penalties for serious tax offences, such as tax evasion, can include substantial fines and imprisonment terms as stipulated in the applicable taxation legislation.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Offence Provisions
Compliance Obligations

Interactions

Authorises

All Versions

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.