Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 171
EXPLANATORY STATEMENT
STATUTORY RULES 1993 No. 171
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. 171 were enacted to revise the rate of wool tax for the financial year from 1 July 1993 to 30 June 1994. The amendment was issued by the authority of the Assistant Treasurer under the Wool Tax Act (Nos 1-5) 1964. These Acts impose a tax on the sale value of shorn wool produced in Australia, and each Act pertains to specific dealings with wool, such as sales by wool brokers and purchases by manufacturers or exporters. The constitutional requirement necessitates separate Acts for each distinct subject of taxation. The primary objective of these regulations is to adjust the tax rates in alignment with recommendations from key industry bodies and stakeholders, aiming to balance revenue needs with industry impacts. The new rates were set to reflect the financial recommendations from the Australian Wool Realisation Commission, the Australian Wool Corporation, and the Wool Research and Development Corporation, ensuring that the tax remains aligned with the economic realities and needs of the wool industry.
Scope and Application
The Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 171 applies to the financial year commencing on 1 July 1993 and sets the rate of wool tax for that period. These regulations pertain to the tax on the sale value of shorn wool produced in Australia, administered under the Wool Tax Acts (Nos 1-5) 1964. The tax applies to specific dealings with wool, including sales by wool brokers, purchases by registered wool dealers, purchases by manufacturers, and exports. The amendments reduce the tax rate for shorn wool other than carpet wool from 12% to 8.5%, while the rate for carpet wool remains at 4%. The tax is divided into three components: one allocated for debt management purposes, one for marketing and promotion, and one for wool research and development, with the debt management component not applying to carpet wool. The regulations require the Governor-General to consider recommendations from various entities, including the Australian Wool Realisation Commission, the Australian Wool Corporation, and the Wool Research and Development Corporation, before setting the tax rate. The amendments reflect the Cabinet's agreement with the recommendations provided by these entities.
Key Provisions
The main operative sections of these regulations (Nos 1-5) (Amendment) 1993 No. 171 are concerned with setting the rate of wool tax for the financial year 1 July 1993 to 30 June 1994. Specifically, Regulation 3(2) stipulates that the tax rate for shorn wool other than carpet wool will be reduced from 12% to 8.5% and the rate for carpet wool will remain unchanged at 4%. The regulations are based on recommendations made by the Australian Wool Realisation Commission (AWRC), the Australian Wool Corporation (AWC), and the Wool Research and Development Corporation (WRDC), and have been approved by the Cabinet.
These regulations impose specific obligations on parties and entities involved in the sale, purchase, or processing of wool in Australia. Under these regulations, wool sellers and buyers must adhere to the specified tax rates for their transactions. Wool brokers, registered wool dealers, manufacturers, and exporters must comply with the tax rates applicable to their dealings with wool. The regulations ensure that the tax is levied on the sale value of shorn wool produced in Australia, as outlined in sections 6 of the Wool Tax Acts (Nos 1-5) 1964. The regulations also require the Governor-General to consider various recommendations and views before setting the tax rates.
Failure to comply with these regulations may result in various consequences. While the explanatory statement does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach, it is likely that non-compliance with the tax rates and regulations could lead to financial penalties or legal action. The specific penalties would be determined by the relevant authorities and would depend on the nature and extent of the non-compliance. It is important for parties and entities involved in wool transactions to adhere to the regulations to avoid any potential consequences.
The maximum tax rates for shorn wool other than carpet wool and carpet wool are 15% and 6% of the sale value of the wool, respectively, as outlined in sections 6 of the Wool Tax Acts (Nos 1-5) 1964. However, the rates cannot be less than 2.75%. The tax has three components: 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 relating to debt management. The Governor-General must consider recommendations from the AWRC, AWC, WRDC, and the Wool Council of Australia when setting the tax rates. The Cabinet has approved the recommended rates for the financial year 1 July 1993 to 30 June 1994.