Wool Tax (No. 5) Regulations (Amendment)

Administered by Department of the Treasury

Legislation au F1996B00165 Regulations Not in force Legislative Instrument

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Wool Tax (Nos 1-5) Regulations (Amendment) 1995 No. 199

EXPLANATORY STATEMENT

STATUTORY RULES 1995 No. 199

ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER

Wool Tax Acts (Nos 1-5) 1964

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

These regulations set the rate of wool tax for the financial year 1 July 1995 to 30 June 1996. 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, the relevant matters are the current recommendations applying to the financial year for the purposes of sections 49 and 50 of the AWRAP Act.

The Wool International Act and the AWRAP Act allow for wool grower ballots to be held to make the current recommendations. However, for the financial year commencing 1 July 1995, no ballot has been held. It was not thought to be necessary since neither the industry nor the Government wished to change the rates from the previous year.

Where a grower ballot has not been held, subsections 51(8) and (9) of the AWRAP Act apply to make the last recommendations made the current recommendations for the financial year in question. This means that the current recommendations for the financial year commencing on 1 July 1995 are the recommendations which applied to the financial year commencing on 1 July 1993, and which also applied in the financial year commencing on 1 July 1994. (Rates of wool tax have not changed since the financial year commencing on 1 July 1991.) Subsection 51 (10) of that Act allows the recommendations of an earlier year to be used as current recommendations, even if, as in this case, they were made under legislation which has been repealed or amended.

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%.

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

Regulation 1 - provides for the amendment of the Regulations.

Regulation 2 - provides that these regulations will commence on 1 July 1995.

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 year commencing on 1 July 1995.

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

 

Overview

The Wool Tax (Nos 1-5) Regulations (Amendment) 1995 No. 199EXPLANATORY STATEMENTSTATUTORY RULES 1995 No. 199, issued under the authority of the Assistant Treasurer, aims to establish the rates of wool tax for the financial year from 1 July 1995 to 30 June 1996. These regulations were enacted to address the need for annual adjustments to the wool tax rates, as stipulated by the Wool Tax Acts (Nos 1-5) 1964. These Acts, which impose a tax on the sale value of shorn wool produced in Australia, require that the tax rates be set via regulations each year, even if there are no changes from the previous year. The policy objective is to ensure that the rates are set in accordance with the recommendations made under the Wool International Act 1993 and the Australian Wool Research and Promotion Organisation Act 1993, thus maintaining consistency and fairness in the taxation of wool sales.

Scope and Application

The Wool Tax (Nos 1-5) Regulations (Amendment) 1995 No. 199 applies to the rates of wool tax imposed by the Wool Tax Acts (Nos 1-5) 1964, which are levied on the sale value of shorn wool produced in Australia. These Acts cover various dealings with wool, such as sales by wool brokers, purchases by wool dealers, purchases by manufacturers, and wool that is subjected to a process of manufacture and export. The regulations are made under the authority of the Assistant Treasurer and cover the financial year from 1 July 1995 to 30 June 1996, setting the tax rate for shorn wool other than carpet wool at 8.5% and the tax rate for carpet wool at 4%. The Governor-General has the power to make these regulations under section 6 of each Act, with the condition that the rates cannot be less than 2.75% and must be prescribed for a single financial year. The rates were determined based on the recommendations of wool grower ballots, which were not held for the financial year starting on 1 July 1995 as there was no change from the previous year’s rates. These regulations are applicable nationally, covering all dealings with shorn wool within Australia, and do not include any stated exclusions, exemptions, or thresholds beyond what is outlined in the primary Acts.

Key Provisions

The Wool Tax (Nos 1-5) Regulations (Amendment) 1995 No. 199 set out the rates of wool tax for the financial year beginning on 1 July 1995 and ending on 30 June 1996. The main operative sections of these regulations, as detailed in Regulation 3, prescribe the tax rates for shorn wool other than carpet wool and carpet wool. Specifically, Regulation 3(1) stipulates that the tax rate for shorn wool other than carpet wool will be 8.5%, and Regulation 3(2) sets the tax rate for carpet wool at 4%. These rates are to be applied to the sale value of shorn wool produced in Australia, as governed by the Wool Tax Acts (Nos 1-5) 1964. These regulations impose obligations on the parties involved in the sale and processing of wool. The primary obligation is for wool producers, brokers, dealers, manufacturers, and exporters to adhere to the prescribed tax rates when conducting transactions involving shorn wool and carpet wool. This includes accurately calculating the tax based on the sale value of the wool and ensuring that the correct amount of tax is remitted to the relevant authorities. The regulations also necessitate that the prescribed rates are applied consistently across all transactions involving these types of wool during the specified financial year. Breaches of these regulations can lead to civil and criminal consequences. Specifically, failure to comply with the tax rate provisions may result in financial penalties. The exact penalties for non-compliance are not detailed in the explanatory statement but can be severe, as outlined under the respective Wool Tax Acts. Non-compliance could also lead to legal action by the relevant authorities, potentially resulting in further financial penalties or other legal repercussions. The seriousness of these consequences underscores the importance of adherence to the prescribed tax rates.

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