Wool Tax (No. 3) Regulations (Amendment)

Administered by Department of the Treasury

Legislation au F1996B00147 Regulations Not in force Legislative Instrument

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Wool Tax (Nos 1-5) Relations (Amendment) 1994 No. 228

EXPLANATORY STATEMENT

STATUTORY RULES 1994 No. 228

ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER

Wool Tax Acts (Nos 1-5) 1964

Wool Tax (Nos 1-5) Relations (Amendment)

These regulations set the rate of wool tax for the financial year 1 July 1994 to 30 June 1995. The rate for shorn wool other than carpet wool will be 8.5% and the rate for carpet wool will be 4%.

The regulations are made under the Wool Tax Acts (Nos. 1-5) 1964 (the Acts), which impose wool tax on the sale value of shorn wool produced in Australia. Each Act imposes the tax on a particular dealing with wool. Broadly speaking, the dealings are sale by a wool broker, purchase by a wool dealer, purchase by a manufacturer, subjecting the wool to a process of manufacture and export. The need for five separate Acts arises from the Constitutional requirement that laws imposing taxes should deal with one subject of taxation only.

Section 6 of each Act gives the Governor-General the power to make regulations. In particular, the Governor-General may make regulations which, within certain limitations, prescribe the rate of tax. The maximum rate which can be prescribed 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%. Moreover, regulations can only prescribe rates of tax for a single financial year. Thus it is necessary to make regulations to prescribe wool tax rates every year, even if the rates are not being changed from the previous year.

In addition, before making regulations prescribing a rate of wool tax, the Governor-General is required, under subsection 6(5) of each Act, to consider certain matters. In the case of shorn wool other than carpet wool, these matters are:

•       the percentage fixed by subsection 43 (2) of the Wool International Act 1993 (which is 4.5%); and

•       the current recommendations applying to the financial year for the purposes of sections 49 and 50 of the Australian Wool Research and Promotion Organisation Act 1993 (AWRAP Act).

In the case of carpet wool, die relevant matters are the current recommendations applying to the financial year for the purposes of sections 49 and 50 of the AWRAP Act.

The "current recommendations" for the financial year commencing 1 July 1994 are the recommendations from the financial year commencing on 1 July 1993. The AWRAP Act allows the recommendations of an earlier year to be adopted as current recommendations, if there would otherwise be no current recommendations. The recommendations of an earlier year can be used as current recommendations, even if, as in this case, they were made under legislation which has been amended or repealed.

The making of recommendations specifically for the financial year commencing 1 July 1994 would have required a grower ballot, and no ballot has been held. It was not thought to be necessary since neither the industry nor the Government wished to change the rates.

With respect to shorn wool other than carpet wool, the rate recommended by the current recommendations is therefore 8.5%, and with respect to carpet wool, the recommended rate is 4%.

These recommendations also repeal earlier Wool Tax (Nos. 1-5) Regulations, Statutory Rules 1980 Nos. 168 - 172. The 1980 Regulations no longer have any effect; however, their continued existence causes confusion because they have the same name as the regulations which are currently being amended.

Details of the proposed amendments to the Regulations are as follows:

Regulation 1 - provides that these regulations will commence on 1 July 1994.

Regulation 2 - provides for the amendment of the Regulations.

Regulation 3 - amends subregulations 3(1) and 3(2) of Wool Tax (Nos. 1-5) Regulations, the subregulations which actually prescribe the rates of wool tax. Subregulation 3(1) sets the rate of tax for shorn wool other than carpet wool at 8.5% and subregulation 3(2) sets the rate for carpet wool at 4%. This regulation provides that subregulations 3(1) and 3(2) will apply for the financial yew commencing on 1 July 1994.

Regulation 4 - repeals former Wool Tax (Nos. 1-5) Regulations.

There are five separate Regulations, because there are separate regulations for each of the Wool Tax Acts (Nos. 1-5).

 

Overview

The Wool Tax (Nos 1-5) Relations (Amendment) 1994 No. 228 Statutory Rules, issued under the authority of the Assistant Treasurer, amends the rates of wool tax set out in the Wool Tax Acts (Nos 1-5) 1964. These Acts impose a tax on the sale value of shorn wool produced in Australia and are divided into five separate Acts due to constitutional requirements that laws imposing taxes must deal with one subject of taxation only. The regulations establish the rate of wool tax for the financial year 1 July 1994 to 30 June 1995, setting it at 8.5% for shorn wool other than carpet wool and 4% for carpet wool. This amendment follows the current recommendations from the Australian Wool Research and Promotion Organisation Act 1993, which, in the absence of a new grower ballot, retain the previous year's rates. The regulations also repeal earlier Wool Tax (Nos 1-5) Regulations, Statutory Rules 1980 Nos. 168-172, to eliminate confusion caused by their continued existence.

Scope and Application

The Wool Tax (Nos 1-5) Relations (Amendment) 1994 No. 228 Statutory Rules, issued under the authority of the Assistant Treasurer, revises the rates of wool tax for the financial year commencing 1 July 1994 to 30 June 1995. These regulations apply to the sale value of shorn wool produced in Australia and are made under the Wool Tax Acts (Nos 1-5) 1964. The Acts impose wool tax on various dealings with wool, including sales by wool brokers, purchases by wool dealers, purchases by manufacturers, and the export of processed wool. Each of the five Acts deals with a distinct subject of taxation as required by the Constitution. The Governor-General has the power to make regulations under section 6 of each Act, specifically to prescribe the rate of tax, which must be between 2.75% and 15% for shorn wool other than carpet wool, and between 2.75% and 6% for carpet wool. These rates must be set annually even if unchanged from the previous year. The regulations for the financial year 1 July 1994 to 30 June 1995 set the tax rate for shorn wool other than carpet wool at 8.5% and for carpet wool at 4%, based on recommendations from the Australian Wool Research and Promotion Organisation Act 1993. These regulations repeal the previous Wool Tax (Nos 1-5) Regulations, Statutory Rules 1980 Nos. 168 - 172, which are no longer in effect.

Key Provisions

The Wool Tax (Nos 1-5) Relations (Amendment) 1994 No. 228, sets forth the rates of wool tax applicable for the financial year commencing on 1 July 1994 and ending on 30 June 1995. Specifically, section 3(1) of the regulation sets the rate of tax for shorn wool other than carpet wool at 8.5%, and section 3(2) sets the rate for carpet wool at 4%. These rates are prescribed under the authority of the Governor-General as per section 6 of the Wool Tax Acts (Nos. 1-5) 1964, which empower the Governor-General to make regulations concerning the rate of wool tax. The maximum rate for shorn wool other than carpet wool is 15%, and for carpet wool, it is 6%, with neither rate being less than 2.75%. These regulations also repeal the previous Wool Tax (Nos. 1-5) Regulations, Statutory Rules 1980 Nos. 168 - 172, to avoid confusion, although the 1980 Regulations are no longer in effect. The obligations imposed by these regulations primarily pertain to the entities and individuals involved in the wool industry. Wool brokers, dealers, manufacturers, and exporters subject to the Wool Tax Acts (Nos. 1-5) 1964 must comply with the prescribed tax rates for the specified financial year. The regulations require these parties to accurately calculate and remit the wool tax on the sale value of shorn wool in accordance with the rates set out in section 3. This includes ensuring that all transactions involving shorn wool other than carpet wool and carpet wool are taxed at the specified percentages. The regulations also require adherence to the procedural requirements set out in section 6, including the consideration of specific matters such as the percentage fixed under the Wool International Act 1993 and the current recommendations under the Australian Wool Research and Promotion Organisation Act 1993. Failure to comply with the tax obligations set forth in these regulations can result in civil and criminal consequences. While the specific penalties are not detailed in the explanatory statement, under the broader Wool Tax Acts (Nos. 1-5) 1964, penalties for non-compliance typically include fines and potential legal action. The severity of these penalties can vary depending on the nature and extent of the breach. For example, wilful or negligent failure to report or remit the correct amount of wool tax can result in significant financial penalties, and in severe cases, criminal charges may be pursued. These consequences underscore the importance of adhering to the prescribed tax rates and reporting requirements.

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