Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 174
EXPLANATORY STATEMENT
STATUTORY RULES 1993 No. 174
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. 174, issued under the authority of the Assistant Treasurer, amend the existing rates of wool tax for the financial year commencing on 1 July 1993 and ending on 30 June 1994. This amendment was enacted to address the need for updated tax rates in accordance with the Wool Tax Acts (Nos 1-5) 1964, which impose a tax on the sale value of shorn wool produced in Australia. The tax is levied on various dealings with wool, including sales by wool brokers, purchases by registered wool dealers, purchases by manufacturers, processing of wool for manufacture, and export. The Wool Tax Acts were created to comply with the constitutional requirement that laws imposing taxes should address only one subject of taxation.
The policy objective of these regulations is to reflect the recommendations of various bodies, including the Australian Wool Realisation Commission, the Australian Wool Corporation, and the Wool Research and Development Corporation, which were taken into account by the Cabinet. As a result, the tax rate for shorn wool other than carpet wool has been reduced from 12% to 8.5%, while the rate for carpet wool remains at 4%. This amendment aims to ensure that the wool industry's contributions to debt management, marketing and promotion, and research and development are accurately reflected in the tax rates.
Scope and Application
The Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 174, issued by the authority of the Assistant Treasurer, amends the rates of wool tax for the financial year commencing 1 July 1993 and ending 30 June 1994. These regulations apply to the sale value of shorn wool produced in Australia, specifically targeting dealings such as the 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 regulations are issued under the Wool Tax Acts (Nos 1-5) 1964, which impose a tax on these specific dealings with wool. The Acts necessitate separate legislation for each type of wool transaction due to constitutional requirements that laws imposing taxes must deal with one subject of taxation only. The tax rates are prescribed by the Governor-General, with the maximum allowable rate for shorn wool other than carpet wool set at 15%, and for carpet wool at 6%, though neither rate can be less than 2.75%. The tax comprises three elements: a portion for debt management purposes, a portion for marketing and promotion, and a portion for wool research and development, with the debt management portion not applying to carpet wool. The amendment reduces 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 regulations are subject to the Governor-General's consideration of recommendations from the Australian Wool Realisation Commission, the Australian Wool Corporation, the Wool Research and Development Corporation, and the Wool Council of Australia before implementation.
Key Provisions
The main operative sections of the Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 174 provide for the amendment of the wool tax rates for the financial year beginning 1 July 1993 and ending 30 June 1994. According to Section 6 of the Wool Tax Acts (Nos 1-5) 1964, the Governor-General is authorised to make regulations for the purposes of these Acts. Regulation 2 details the amendment, reducing the rate for shorn wool other than carpet wool from 12% to 8.5%, while the rate for carpet wool remains unchanged at 4%. These Acts impose a tax on the sale value of shorn wool produced in Australia, with specific provisions for various dealings such as sales by wool brokers and purchases by registered wool dealers, manufacturers, and those subjecting the wool to a manufacturing process or exporting it.
The obligations imposed by these Acts and regulations require entities involved in the sale or purchase of shorn wool in Australia to comply with the specified tax rates. This includes wool brokers, registered wool dealers, manufacturers, and exporters who must adhere to the tax rates set forth by the regulations. Additionally, the Governor-General must consider various recommendations before setting the tax rate, including those from the Australian Wool Realisation Commission (AWRC), the Australian Wool Corporation, and the Wool Research and Development Corporation (WRDC). The Governor-General must also take into account any views expressed by the Wool Council of Australia to the AWRC.
Any failure to comply with these regulations can lead to civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, non-compliance with tax regulations can generally result in fines or legal action. The exact penalties would be determined under the broader tax legislation, which may include both administrative penalties and criminal sanctions depending on the severity and intent of the non-compliance. In cases of significant non-compliance or evasion, the penalties could include substantial fines and potential imprisonment. The precise nature and extent of these penalties would be governed by the general tax laws applicable in Australia.