Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 170
EXPLANATORY STATEMENT
STATUTORY RULES 1993 No. 170
ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER
Wool Tax Act (Nos 1-5) 1964
Wool Tax Regulations (Nos 1-5) (Amendment)
These regulations will set the rate of wool tax for the financial year 1 July 1993 to 30 June 1994. The rate for shorn wool other than carpet wool will be reduced from 12% to 8.5% and the rate for carpet wool will remain at 4%.
Sections 6 of the Wool Tax Acts (Nos. 1-5) 1964 (the Acts) provides that the Governor-General may make regulations for the purposes of these Acts. The Wool Tax Acts impose a tax on the sale value of shorn wool produced in Australia. Each of the Wool Tax Acts imposes the tax on a particular dealing with wool. The dealings to which the Acts relate are sale by a wool broker, purchase by a registered wool dealer, purchase by a manufacturer, subjecting the wool to a process of manufacture and export. The need for five separate Acts arises from a Constitutional requirement that laws imposing taxes should deal with one subject of taxation only.
Under each Act, the Governor-General may, within certain limits, prescribe the rate of tax. The maximum rate for shorn wool other than carpet wool is 15% of the sale value of the wool and the maximum rate for carpet wool is 6% of the sale value of the wool. Neither rate can be less than 2.75%. The tax has three elements, a portion allocated to debt management purposes, a portion for marketing and promotion and a portion for wool research and development. Carpet wool does not bear the portion which relates to debt management.
Before making the regulations, the Governor-General is required to consider certain recommendations in relation to the setting of the rate. In the case of shorn wool other than carpet wool, these are the recommendations made by:
• the Australian Wool Realisation Commission (AWRC); and
• the last or special general meeting of wool tax payers held pursuant to the Australian Wool Corporation Act 1991; and
• the last annual general meeting of the Wool Research and Development Corporation (WRDC).
In the case of carpet wool, they are the recommendations made by:
• the last or special general meeting of wool tax payers held pursuant to the Australian Wool Corporation Act 1991; and
• the last annual general meeting of the WRDC.
The Governor-General is also required to consider any views in relation to the rate of wool tax expressed by the Wool Council of Australia to the Australian Wool Realisation Commission.
The Minister for Primary Industries and Energy has now received recommendations on the rate of wool tax on wool sold on and after 1 July 1993. The AWRC recommendation, which takes into account the views of the Wool Council of Australia, is for a rate of 4.5%. This is for the debt management component of the tax. The Australian Wool Corporation annual general meeting has recommended that the marketing and promotion component of the tax should be 3.5%. The WRDC has recommended that the component of the tax for research and development be .5%. These recommendations result in a total rate of 8.5% for shorn wool other than carpet wool.
With respect to carpet wool, the rates recommended are also 3.5% for marketing and promotion (the Australian Wool Corporation component) and 5% for research and development. This gives a total rate for carpet wool of 4%, unchanged since last year.
The Cabinet agreed with these recommendations.
Details of the proposed amendments to the Regulations are as follows:
Regulation 1 - provides that these regulations will commence on 1 July 1993.
Regulation 2 - provides for the amendment of the Regulations.
Regulation 3 - subregulations 3(1) and 3(3) provide that the Regulations will apply for the financial year commencing on 1 July 1993. Subregulation 3(2) provides that the rate for shorn wool other than carpet wool will be 8.5%.
Overview
The Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 170, issued under the authority of the Assistant Treasurer, amends the Wool Tax Regulations to adjust the rates of tax for the financial year commencing on 1 July 1993 and ending on 30 June 1994. This amendment follows the legislative framework established by the Wool Tax Acts (Nos 1-5) 1964, which impose a tax on the sale value of shorn wool produced in Australia, covering various dealings with wool such as sales by brokers and purchases by dealers and manufacturers. The Wool Tax Acts, consistent with constitutional requirements, are separate Acts each targeting a distinct wool-related transaction.
The purpose of these amendments is to reduce the tax rate for shorn wool other than carpet wool from 12% to 8.5%, while maintaining the rate for carpet wool at 4%. The tax comprises portions allocated to debt management, marketing and promotion, and wool research and development, with the debt management portion excluded for carpet wool. The amendments are based on recommendations from the Australian Wool Realisation Commission, the Australian Wool Corporation, and the Wool Research and Development Corporation, as well as the Cabinet's approval. This legislative change aims to align the tax rates with the economic conditions and stakeholder recommendations for the wool industry.
Scope and Application
The Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 170 applies to the financial year commencing 1 July 1993 and ending 30 June 1994, and it amends the rates of wool tax imposed by the Wool Tax Acts (Nos. 1-5) 1964. These Acts impose a tax on the sale value of shorn wool produced in Australia, specifically on transactions involving the sale by a wool broker, purchase by a registered wool dealer or a manufacturer, and the export of wool following a process of manufacture. The Acts pertain to entities and persons engaged in these activities within Australia. The regulations are made under the authority of the Assistant Treasurer and establish the rate of tax for the specified financial year, reducing the rate for shorn wool other than carpet wool from 12% to 8.5% and maintaining the rate for carpet wool at 4%. The tax has three components: debt management, marketing and promotion, and wool research and development, with carpet wool exempt from the debt management portion. The application of the tax is restricted to dealings occurring within Australia and is not subject to exclusions or exemptions outlined in the explanatory statement, though the Wool Tax Acts themselves may contain specific provisions regarding exemptions or exclusions. The application of these regulations may be further detailed or extended through subordinate instruments made under the authority of the Governor-General in accordance with the provisions of the Wool Tax Acts.
Key Provisions
The Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 170, which amend the Wool Tax Regulations (Nos 1-5) 1964, set the rate of wool tax for the financial year 1 July 1993 to 30 June 1994. Section 6 of the Wool Tax Acts (Nos. 1-5) 1964 allows the Governor-General to make regulations for the purposes of these Acts. These Acts impose a tax on the sale value of shorn wool produced in Australia, with the tax applied to various wool-related dealings. The Acts are divided into separate laws to comply with the constitutional requirement that laws imposing taxes should deal with one subject of taxation only. The maximum rate for shorn wool other than carpet wool is 15%, while the maximum rate for carpet wool is 6%, with neither rate being less than 2.75%. The tax has three components: debt management, marketing and promotion, and research and development. Carpet wool does not bear the portion related to debt management.
The Governor-General must consider specific recommendations before setting the tax rate. For shorn wool other than carpet wool, these include recommendations from the Australian Wool Realisation Commission, the last or special general meeting of wool tax payers under the Australian Wool Corporation Act 1991, and the last annual general meeting of the Wool Research and Development Corporation (WRDC). For carpet wool, recommendations are required from the last or special general meeting of wool tax payers and the last annual general meeting of the WRDC. The Governor-General must also consider any views expressed by the Wool Council of Australia to the Australian Wool Realisation Commission. In this case, the Australian Wool Realisation Commission recommended a rate of 4.5% for the debt management component, the Australian Wool Corporation annual general meeting recommended a rate of 3.5% for marketing and promotion, and the WRDC recommended a rate of 0.5% for research and development, resulting in a total rate of 8.5% for shorn wool other than carpet wool. For carpet wool, the total rate remains at 4%, unchanged from the previous year.
The regulations impose obligations on the parties and entities governed by the Wool Tax Acts. The Governor-General must consider the recommendations from specified bodies and the views of the Wool Council of Australia before setting the tax rate. The wool industry stakeholders, including the Australian Wool Realisation Commission, the Australian Wool Corporation, and the WRDC, are required to provide their recommendations based on the relevant considerations. The Wool Council of Australia must express its views on the proposed tax rate to the Australian Wool Realisation Commission. These obligations ensure that the tax rate is set in consultation with key industry stakeholders and considers various factors impacting the wool industry.
Breach of the regulations or non-compliance with the set tax rates may result in civil or criminal consequences. The specific penalties for breach are not detailed in the explanatory statement, but under the Wool Tax Acts, penalties may include fines and other civil or criminal sanctions. The exact penalties would be determined based on the nature and severity of the breach, and the specific provisions of the Wool Tax Acts and any related legislation. It is essential for the parties and entities governed by the Acts to adhere to the regulations and comply with the set tax rates to avoid potential penalties and legal consequences.