EXPLANATORY STATEMENT
STATUTORY RULES 1990 No. 195
Issued By The Authority Of The Treasurer
Wool Tax Acts (Nos. 1-5) 1964
WOOL TAX (Nos. 1-5) REGULATIONS (AMENDMENT)
These regulations prescribe the rate of wool tax for the purposes of subsection 6(1) of each of the Wool Tax Acts (Nos. 1-5) 1964 (the Acts) at 18 per cent of the sale value of shorn wool, effective on and from 1 July 1990.
The Acts impose tax on shorn wool produced in Australia and sold through various marketing channels, namely, sold by a wool broker or through a registered wool dealer or manufacturer, subjected to a process of manufacture or exported for sale. The need for five separate Acts arises from a constitutional requirement that laws imposing taxes should deal with one subject of taxation only.
Amendments of the Acts by the Wool Tax (Nos. 1-5) Amendment Acts 1990 increased the rate of tax from 10 per cent to 20 per cent. The Governor-General, under section 6 of each of the Acts, is authorised to make regulations prescribing a lower rate of tax, being a rate not less than 5.25 per cent. Before making regulations under section 6, the Governor-General is required to take into consideration any recommendations with respect to the rate that is made to the Treasurer by the Wool Council of Australia.
The Wool Council of Australia recommended that the rate of wool tax for the 1990-91 financial year be set at 18 per cent. These regulations, which give effect to the recommendation, mean that the operative rate of wool tax will be 18 per cent of the sale value of shorn wool sold on or after 1 July 1990.
Details of the amending regulations are as follows:
Commencement
By regulation 1 the amendments to the Wool Tax (Nos. 1-5) Regulations come into effect on 1 July 1990.
Prescribed lower rate of tax
Regulation 2 in accordance with paragraph 5(b) of each of the Wool Tax Acts (Nos. 1-5) 1964, amended regulation 3 of the Wool Tax (Nos. 1-5) Regulations by increasing the operative rate of wool tax from 8 per cent to 18 per cent.
Overview
The Wool Tax (Nos. 1-5) Regulations (Amendment) Statutory Rules 1990 No. 195, issued by the authority of the Treasurer, were enacted to address the need to adjust the rate of wool tax in Australia. These regulations, effective from 1 July 1990, set the tax rate at 18 per cent of the sale value of shorn wool, following an increase from the previous rate of 10 per cent. The enactment of these regulations by the Governor-General, under section 6 of each of the Wool Tax Acts (Nos. 1-5) 1964, aligns with the constitutional requirement that laws imposing taxes should deal with one subject of taxation only. The amendments were made in response to recommendations from the Wool Council of Australia, reflecting a policy objective to maintain a balanced tax rate that considers industry feedback and economic conditions.
Scope and Application
The Wool Tax Acts (Nos. 1-5) 1964, as amended by the Wool Tax (Nos. 1-5) Regulations (Amendment) 1990, impose a tax on shorn wool produced in Australia and sold through various channels, including via wool brokers, registered wool dealers or manufacturers, subjected to manufacturing processes, or exported for sale. These Acts apply to the sale of shorn wool within Australia, ensuring that tax is collected on wool regardless of the subsequent use or sale location. The need for five distinct Acts stems from the constitutional requirement that laws imposing taxes must address only one subject of taxation. The regulations, effective from 1 July 1990, set the tax rate at 18 per cent of the sale value of shorn wool, reflecting the recommendation by the Wool Council of Australia. This rate is applicable to wool sold on or after this date, and the Governor-General, under the authority provided by section 6 of each Act, can make regulations to prescribe a lower rate, provided it is not less than 5.25 per cent. The amendments also allow for the application of the tax through subordinate instruments, thereby extending or restricting its application as necessary.
Key Provisions
The Wool Tax (Nos. 1-5) Regulations (Amendment) provide key provisions for the taxation of shorn wool in Australia, aligning with the Wool Tax Acts (Nos. 1-5) 1964 (sections 6(1)). These regulations set the tax rate at 18 per cent of the sale value of shorn wool sold on or after 1 July 1990. This rate is applicable to wool produced in Australia and sold through various channels, including by wool brokers, registered wool dealers or manufacturers, or for export. The need for multiple Acts stems from the constitutional requirement that laws imposing taxes should address one subject of taxation only.
The regulations impose certain obligations on parties involved in the sale of shorn wool. These obligations include ensuring that the tax is calculated correctly at 18 per cent of the sale value and that it is remitted to the appropriate authorities. The tax applies to all transactions occurring after the specified commencement date. Wool brokers, dealers, manufacturers, and exporters must be aware of this tax rate and ensure compliance with the stipulated requirements in their sales activities.
Breach of the provisions in these regulations can lead to civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, typically, failure to comply with tax regulations in Australia can result in fines and other legal actions. The maximum penalties may vary depending on the severity and intent behind the non-compliance. It is essential for those involved in the wool industry to adhere to the regulations to avoid potential legal repercussions.