Tobacco Charge (No. 1) (Rate of Charge) Regulations (Amendment) 1997 No. 90
EXPLANATORY STATEMENT
Statutory Rules 1997 No. 90
Issued by the Authority of the Assistant Treasurer
Tobacco Charge Act (No. 1) 1955
Tobacco Charge (No. 1) (Rate of Charge) Regulations (Amendment)
Subsection 6(1) of the Tobacco Charge Act (No. 1) 1955 (the Act) provides that the Governor-General may make regulations which prescribe the rate of tobacco charge, provided that the total rate does not exceed six cents. Subsection 6(2) of the Act provides that in making regulations which set the rate of tobacco charge, the Governor-General must take into account any recommendation made to the Minister by the Australian Tobacco Board.
In 1990 the Australian Tobacco Board changed its name to the Australian Tobacco Marketing Advisory Committee (ATMAC). However, ATMAC was abolished on 7 April 1997, when its founding legislation, the Tobacco Marketing Act 1965, was repealed. Since ATMAC has been formally abolished, there is no body that can make recommendations that the GovernorGeneral must take into account under subsection 6(2) of the Act. Therefore, the GovernorGeneral can now make regulations under subsection 6(1) of the Act without the need for any industry body recommendation.
The Act is one of the three Tobacco Charge Acts (No. 1-3) 1955, which impose tobacco charge on certain transactions with tobacco leaf grown in Australia- Broadly speaking, the charge is imposed on transactions such as sale or purhase by a manufacturer or the use in manufacturing by a grower. This is provided that the tobacco has not already been subject to the charge. The proposed regulations under the Act set the rate of tax for each of the Tobacco Charge Acts (Nos. 1-3)..
The regulations will increase the rate of tobacco charge from 3.2 cents per kilogram of tobacco leaf to 4.2 cents per kilogram of tobacco leaf, with effect from the date of gazettal.
Tobacco charge used to be levied in two parts. The first part of the charge, imposed by subregulation 4(1) was to raise funds for FATMAC. The second part of the charge, imposed by subregulation 4(2), is to raise funds for the Tobacco Research and Development Corporation (TRDC) for research. However, due to the winding up of ATMAC the charge imposed by subregulation 4(1) has been and will continue to be zero. The charge is now effectively to fund the TRDC.
The Government has decided that the existing, charge should be increased by one cent per kilogram of tobacco leaf. This increase is to help ensure that the research needs of the industry, both present and future, continue to be met. This increase has the support of the TRDC.
Details of the amendments to the Regulations are as follows:
Regulation 1 - provides for the amendment of the Regulations and the note to Regulation 1 provides that these regulations commence on the date of gazettal.
Regulation 2 - amends subregulation 4(2) of Tobacco Charge (No. 1) (Rate of Charge) Regulations. Subregulation 4(2) prescribes the amount for the purposes of funding the TRDC. The amount prescribed for this purpose will be increased from 3.2 cents to 4.2 cents.
Overview
The Tobacco Charge (No. 1) (Rate of Charge) Regulations (Amendment) 1997 No. 90 amends the Tobacco Charge (No. 1) (Rate of Charge) Regulations 1955 under the authority of the Assistant Treasurer. The Act was introduced to address the need for a legislative mechanism to set the rate of tobacco charge, particularly in light of the abolition of the Australian Tobacco Marketing Advisory Committee (ATMAC), which previously made recommendations to the Minister regarding the tobacco charge rate. The Tobacco Charge Acts (No. 1-3) 1955 were enacted to impose a charge on certain transactions with tobacco leaf grown in Australia, with the proceeds used to fund the Australian Tobacco Marketing Advisory Committee and the Tobacco Research and Development Corporation. With the dissolution of ATMAC, the Act now only serves to fund the Tobacco Research and Development Corporation. The amendments increase the tobacco charge from 3.2 cents to 4.2 cents per kilogram of tobacco leaf to support ongoing and future research needs in the industry, with this decision backed by the TRDC.
Scope and Application
The Tobacco Charge (No. 1) (Rate of Charge) Regulations (Amendment) 1997 No. 90, issued under the Tobacco Charge Act (No. 1) 1955, applies to transactions involving tobacco leaf grown in Australia. Specifically, it targets activities such as the sale or purchase by manufacturers and the use of tobacco in manufacturing by growers, provided that the tobacco has not already been subjected to the charge. The amendment increases the rate of tobacco charge from 3.2 cents to 4.2 cents per kilogram of tobacco leaf, effective from the date of gazettal. This regulation is part of a series of Tobacco Charge Acts (Nos. 1-3) 1955, designed to impose a charge on certain tobacco-related transactions to fund research through the Tobacco Research and Development Corporation (TRDC). The increase in the charge is intended to support ongoing and future research needs of the industry, with the support of the TRDC. The amendment reflects the abolition of the Australian Tobacco Marketing Advisory Committee (ATMAC), which previously provided recommendations to the Minister under subsection 6(2) of the Act, allowing the Governor-General to now set the rate of charge independently under subsection 6(1).
Key Provisions
The Tobacco Charge (No. 1) (Rate of Charge) Regulations (Amendment) 1997 No. 90, as detailed in the explanatory statement, introduces changes to the rate of tobacco charge under the Tobacco Charge Act (No. 1) 1955. According to subsection 6(1) of the Act, the Governor-General has the authority to make regulations that set the rate of tobacco charge, with the total rate not exceeding six cents. The amendment, as outlined in Regulation 2, increases the tobacco charge from 3.2 cents to 4.2 cents per kilogram of tobacco leaf, effective from the date of gazettal. This amendment reflects the changes in the administrative body responsible for the charge, as the Australian Tobacco Marketing Advisory Committee (ATMAC), which was previously responsible for making recommendations to the Minister, has been abolished.
The Act imposes obligations on entities involved in tobacco transactions in Australia. These obligations primarily revolve around the payment of the tobacco charge on transactions such as the sale or purchase by a manufacturer, or the use in manufacturing by a grower, provided that the tobacco has not already been subject to the charge. The Act requires the payment of the charge to fund the Tobacco Research and Development Corporation (TRDC), which supports research in the tobacco industry. Given the amendment, entities must now ensure compliance with the new rate of 4.2 cents per kilogram of tobacco leaf.
The regulations also include provisions for civil and criminal consequences in the event of non-compliance. While the specific penalties are not detailed in the explanatory statement, it is implied that breach of the Act’s provisions could lead to enforcement actions. Historically, non-compliance with similar legislative requirements may have resulted in fines or other penalties as stipulated under the relevant legislative framework. The precise penalties would be governed by the broader legislative context within which the Tobacco Charge Act operates, but the increased charge underscores the seriousness with which the government treats compliance with these regulations.