Additional
remarks from Labor Senators
Under this Bill many
businesses will pay fuel tax for the first time. The excise or customs duty is
to be paid upfront and the associated credit to be claimed by businesses via
the business activity statement (BAS) in the same way as input tax credits are
claimed for the GST.
The committee has
received strong representations from manufacturers and ACCI. In addition, primary producers would be
adversely affected.
These manufacturers
claim that the new arrangements will potentially cause major cash flow problems
for medium sized producers. Currently
these producers are effectively fuel tax free due to remission certificates
from excise and customs on fuel inputs.
Now they must pay the fuel tax and get the credit when they lodge the
BAS. Producers with turnover of $20m
must report monthly for GST purposes.
Providing that the GST refunds are made quickly these producers will not
face major delays. However, businesses
with turnover from $2m-20m report quarterly and thus face major delays between
payment of the tax and the associated credit.
Clearly this measure
would cause cash flow problems. In
addition the ATO has been very slow in processing refunds when there has been
an audit or review of the BAS as identified by the ANAO.
Businesses are still
likely to face cash flow concerns after the two year transitional period
expires. There is no reason to expect
that their cash flow situation is likely to change substantially over that
period. Consequently, if there is a
problem now then the problem will still exist after the transitional period
expires.
Labor Senators are
therefore predisposed to a model whereby the option of applying for payment
receipt of the fuel tax credit upon payment of the fuel tax continues beyond
the two year transitional period. In
addition, there seems no reason for the application to have to be made by 31
December 2006 to be part of the transitional scheme as proposed in the
Minister’s amendments now in circulation.
Labor senators believe that the Bill should
be amended along the following lines:
1) the
two year transitional arrangements for early payment of the fuel tax credit be
provided for on an ongoing basis; and
2) that the 31 December 2006 date for receipt of
applications for early payment be dispensed with.
Senator Ursula Stephens
Senator Ruth Webber
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