Tobacco Charge (No 1) (Rate of Charge) Regulations (Amendment) 1995 No. 43
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 43
Issued by the Authority of the Assistant Treasurer
Tobacco Charge Act (No. 1) 1955
Tobacco Charge (No 1) (Rate of Charge) Regulations (Amendment)
Section 6 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 rate does not exceed 6 cents. The Governor-General is also required to take into consideration the recommendations of the Australian Tobacco Marketing Advisory Council (ATMAC). ATMAC was formerly the Australian Tobacco Board.
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 transactions on which the charge is imposed are sale or purchase by a manufacturer, and use in manufacturing by a grower, provided that the tobacco has not already been subject to the charge. The regulations set the rate of tax for each of the Tobacco Charge Acts (Nos. 1 - 3).
These regulations will reduce the rate of tobacco charge from 4.2 cents to 3.2 cents per kilogram of tobacco leaf, with effect from 28 February 1995.
Tobacco charge is the sum of the amounts imposed under paragraphs 5(a) and 5(b) of the Act An amount equivalent to the revenue collected under paragraph 5(a) goes to finance ATMAC's operations. The amount equivalent to the revenue collected under paragraph 5(b) finances the operations of the Tobacco Research and Development Council.
On 22 November 1994, ATMAC wrote to the Treasurer, recommending that the rate of tobacco charge be reduced from 4.2 cents to 3.2 cents per kilogram of tobacco leaf. However, depending on circumstances, ATMAC recommended different methods of apportioning the charge between paragraphs 5(a) and 5(b).
In the event that the government had announced that ATMAC was to be wound up, it was recommended that rate under paragraph 5(a) should be reduced from 1.5 cents per kilogram of tobacco leaf to zero, and the rate under paragraph 5(b) should be increased from 2.7 cents to 3.2 cents. If the government had not announced that ATMAC was to be wound up, then it was recommended that the rate under paragraph 5(a) be reduced from 1.5 cents to 0.5 cents, and the rate under paragraph 5(b) should be unchanged.
Since the government had announced on 13 December 1994 that ATMAC was to be wound up, these regulations put the first method of apportionment in place. The rate for the purposes of paragraph 5(a) of the Act will therefore be zero, and the rate of the purposes of paragraph 5(b) will be 3.2 cents. The regulations will set the rate of tobacco charge for each of the Tobacco Charges Acts (Nos. 1 - 5).
The regulations will commence on 28 February 1995.
Details of the proposed amendments to the Regulations are as follows:
Regulation 1 - provides that these regulations will commence on 28 February 1995.
Regulation 2 - provides for the amendment of the Regulations.
Regulation 3 - amends subregulations 4(1) and 4(2) of Tobacco Charge (No. 1) (Rate of Charge) Regulations, the subregulations which actually prescribe the rate of tobacco charge. Subregulation 3(1) prescribes the amount of 0 cents for the purposes of paragraph 5(a) and subregulation 3(2) prescribes the amount of 3.2 cents for the purposes of paragraph 5(b).
Overview
The Tobacco Charge (No 1) (Rate of Charge) Regulations (Amendment) 1995 No. 43 were enacted to amend the rate of tobacco charge set out in the Tobacco Charge Act (No. 1) 1955. This Act, alongside its counterparts Tobacco Charge Acts (Nos. 2 and 3) 1955, imposes a charge on certain transactions involving tobacco leaf grown in Australia, with the primary transactions being the sale or purchase by a manufacturer and the use in manufacturing by a grower, provided that the tobacco has not already been subject to the charge. The amendments were made under the authority of the Assistant Treasurer and aim to align with the recommendations of the Australian Tobacco Marketing Advisory Council (ATMAC), which was previously known as the Australian Tobacco Board. These amendments reduce the rate of tobacco charge from 4.2 cents to 3.2 cents per kilogram of tobacco leaf, effective from 28 February 1995. The policy objective is to adjust the rate of tobacco charge in line with the council's recommendations, ensuring that the revenue generated is appropriately allocated to finance the operations of ATMAC and the Tobacco Research and Development Council.
Scope and Application
The Tobacco Charge (No 1) (Rate of Charge) Regulations (Amendment) 1995 No. 43 applies to the Tobacco Charge Acts (No. 1-3) 1955, which impose tobacco charge on certain transactions involving tobacco leaf grown in Australia. The Act targets manufacturers and growers involved in the sale or purchase of tobacco leaf or its use in manufacturing, provided that the tobacco has not previously been subject to the charge. The Act applies nationally across Australia, as it is a Commonwealth Act. The Act does not specify any exclusions or exemptions, although the rate of charge is subject to certain recommendations and conditions, such as the winding up of the Australian Tobacco Marketing Advisory Council. The Act's application is extended through subordinate instruments, namely the regulations, which set the rate of tobacco charge for each of the Tobacco Charge Acts (Nos. 1-3). These regulations, which will reduce the rate of tobacco charge from 4.2 cents to 3.2 cents per kilogram of tobacco leaf, will commence on 28 February 1995.
Key Provisions
The Tobacco Charge (No 1) (Rate of Charge) Regulations (Amendment) 1995 No. 43, issued under the authority of the Assistant Treasurer, amends the Tobacco Charge Act (No 1) 1955. These regulations adjust the rate of tobacco charge imposed on certain transactions involving tobacco leaf grown in Australia, as provided for in section 6 of the Act. The new rate reduces the tobacco charge from 4.2 cents to 3.2 cents per kilogram of tobacco leaf, effective from 28 February 1995. The Act, alongside the Tobacco Charge Acts (Nos. 2 and 3) 1955, applies to the sale or purchase by a manufacturer, and use in manufacturing by a grower, of tobacco leaf not previously subjected to the charge. The regulations detail the rate of tax for each of these acts, setting out the financial burden imposed on these transactions.
These regulations impose specific obligations on parties involved in tobacco transactions. Manufacturers and growers must now adhere to the new tobacco charge rate of 3.2 cents per kilogram, as prescribed by Regulation 3 of the amended regulations. The adjustments made to subregulations 4(1) and 4(2) of the Tobacco Charge (No 1) (Rate of Charge) Regulations ensure that the new rates are implemented correctly. Additionally, the Act mandates that the Governor-General consider recommendations from the Australian Tobacco Marketing Advisory Council (ATMAC) when setting the charge rate, ensuring that the revised rates are in line with industry advice.
The regulations also outline potential consequences for non-compliance with the new tobacco charge rates. While the explanatory statement does not specify any particular offences or penalties for breaching these regulations, it is likely that the Act includes provisions for enforcement and penalties for non-compliance. Historically, breaches of similar legislative provisions may result in fines or other legal penalties. It is essential for manufacturers and growers to ensure they are adhering to the new rates to avoid any potential civil or criminal consequences. The precise nature of these penalties would be detailed within the primary Act itself, ensuring that all parties are aware of the legal ramifications of failing to comply with the amended regulations.