Chapter 1


Chapter 1

Introduction

Conduct of the inquiry

1.1        Pursuant to the resolution of the Senate agreed to on 15 May 2013 regarding the referral of time critical bills,[1] on 29 May 2013 the Tax Laws Amendment (2013 Measures No. 2) Bill 2013 (the bill) was referred to the Economics Legislation Committee for inquiry and report by 17 June 2013.

1.2        The committee advertised the inquiry into the bill on its website and wrote directly to a range of organisations inviting written submissions. The committee received nine submissions, which are listed at Appendix 1. The committee thanks the organisations that contributed to this inquiry.

1.3        It is often the case that a public hearing is held as part of a bill inquiry. In the case of the current inquiry, and despite the very short reporting schedule, Government senators accommodated the wishes of Coalition senators and agreed to hold a public hearing into the time critical bill.

1.4        Subsequent to this agreement, the Coalition requested that the hearing be moved despite the difficulties this presented to Government senators. Government senators were unable to accommodate this request and so no public hearing was held into the bill.

Overview of the bill 

1.5        Prior to the bill being passed by the House of Representatives, the bill was amended as follows:

  • Schedules 3 and 4 were omitted from the bill. These schedules included proposed amendments that would bring entities that provide tax agent services in the course of providing advice of a kind that is usually provided by a financial services licensee or a representative of a financial services licensee within the regulatory regime of the Tax Practitioners Board.
  • Schedule 10 was amended to add an additional entity to the list of specifically listed deductible gift recipients.

1.6        The bill, which contains nine schedules following the amendments made by the House of Representatives, proposes to amend various taxation laws to implement a number of changes, which include:

  • requiring large entities in the Pay As You Go (PAYG) instalment system to make their instalments monthly, instead of quarterly (schedule 1);
  • introducing a tax loss incentive for designated nationally significant infrastructure projects (schedule 2);
  • requiring the Commissioner of Taxation to publish certain information obtained from tax returns of corporate tax entities that have an annual total income of $100 million or more, and to publish an entity's Minerals Resource Rent Tax (MRRT) or Petroleum Resource Rent Tax (PRRT) payable as reported by the entity, regardless of its total income (schedule 5);
  • allowing the Commissioner of Taxation to periodically publish aggregate tax collection information, irrespective of the size of corporate entities paying a particular tax (schedule 5);
  • enhancing information sharing between government agencies in relation to decisions under the Foreign Acquisitions and Takeovers Act 1975 and Australia's Foreign Investment Policy (schedule 5);
  • ensuring the PRRT continues to operate as a profits based tax (schedule 6);
  • removing the eligibility for the 50 per cent capital gains tax (CGT) discount accrued after 8 May 2012 by foreign and temporary resident individuals on taxable Australian property, such as real estate and mining assets (schedule 7);
  • exempting payments made to individuals under the Defence Abuse Reparation Scheme from income tax (schedule 8);
  • establishing the framework for making certain National Disability Insurance Scheme funded supports free from the goods and services tax (GST) (schedule 9); and
  • adding new names to the list of deductible gift recipients identified in Division 30 of the Income Tax Assessment Act 1997 (ITAA 1997) (schedule 10).

1.7        Schedule 11 also proposes miscellaneous amendments to certain taxation and superannuation laws.

Key provisions of the bill and structure of this report

1.8        Several submissions to the inquiry raised concerns in relation to schedules 3 and 4, which were contained in the first reading version of the bill (as introduced in the House of Representatives). However, as amendments made to the bill following its introduction have omitted these schedules, the committee has not considered these provisions. Further, on 6 June 2013, the House of Representatives referred a dedicated inquiry into the creation of a regulatory framework for tax (financial) advice services, based on schedules 3 and 4 to the original version of the bill, to the Parliamentary Joint Committee on Corporations and Financial Services.

1.9        Turning to the bill as amended, submissions to the inquiry raised concerns regarding schedules 1, 2, 5 and 7. Accordingly, the committee's report describes and considers only those schedules. The explanatory memorandum to the bill sets out all of the provisions of the bill in detail.

1.10      This report is comprised of two chapters—the examination of the key schedules and the committee's view on the overall bill can be found in chapter 2.

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