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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2008-07-23 Daily Xml
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STATUTES AMENDMENT AND REPEAL (TAXATION ADMINISTRATION) BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (00:26): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Statutes Amendment and Repeal (Taxation Administration) Bill 2008 makes amendments to a number of Acts which are consistent with the Government's target of a reduction of at least 25% in red tape for business by mid-2008.

The Bill amends the Stamp Duties Act 1923, the Payroll Tax Act 1971 and the Land Tax Act 1936 to remove all redundant provisions.

The majority of the redundant provisions are being removed from the Stamp Duties Act, particularly in relation to provisions dealing with listed marketable securities. The changes will make the Act easier to read and reduce taxpayer confusion.

The Bill also amends the Taxation Administration Act 1996 ('the TAA') to include provisions that provide an administrative framework to allow tax investigations to be conducted by taxation officers beyond State and Territory borders.

The streamlined and modernised reciprocal power provisions in the TAA will replace the provisions currently contained in the Taxation (Reciprocal Powers) Act 1989 (the 'TRPA') and hence allow for its repeal.

The amendments will improve administrative efficiency for both industry and RevenueSA.

South Australia and Victoria are the only jurisdictions that retain independent reciprocal taxation powers legislation. Consolidating the provisions of the TRPA into the TAA is therefore consistent with the arrangements in place in other jurisdictions and will reduce the number of statutes with which practitioners are required to comply.

The benefits of the consolidation of investigatory powers in the TAA include greater inter-jurisdictional consistency, modernisation of the language and structure of the provisions, and have provided the opportunity to review and update statutory requirements.

Whilst the TAA is being opened up for amendment the Government has also taken the opportunity to amend an obsolete provision in the TAA that relates to how the market rate of interest is set in the Act.

The market rate of interest set by the TAA is currently linked to the rate applicable under section 214(8) of the Income Tax Assessment Act 1936 of the Commonwealth, but the Commonwealth ceased publication of a market rate of interest under that section in 1999.

It has therefore been necessary for the market rate to be specified each financial year by the Treasurer in the Gazette which is administratively inefficient.

It is therefore proposed that the market rate of interest will now be legislatively tied to the average rate of the 90-day Bank Accepted Bill Rate prescribed by the Reserve Bank of Australia for the month of May preceding each financial year.

The Treasurer will still have the power to specify a different rate of interest by publishing it in the Gazette. The proposed change will provide an efficiency benefit for Government and certainty for taxpayers.

The Bill also amends the Emergency Services Funding Act 1998 (the 'ESL Act') to align the administrative processes under the ESL Act with those contained in the TAA.

The ESL Act provides for the collection of funds for the provision of emergency services in South Australia.

RevenueSA is responsible for the collection of the fixed property component of the ESL Act with TransportSA the levy collector for the mobile property component. The changes in the Bill relate only to the fixed property component of the levy.

The administrative provisions of the ESL Act are deficient in comparison to the administrative provisions contained in the TAA which is used by RevenueSA to administer the other laws for which it is responsible. This has resulted in administrative inconsistencies between ESL administration and the remaining taxation legislation administered by RevenueSA.

Due to the lack of rigorous administrative provisions in the ESL Act, many issues have had to be dealt with by administrative practice, which although workable, is not the optimum approach as it does not provide certainty and transparency for levy payers.

The addition of robust administrative provisions into the ESL Act modelled on those in the TAA will also provide consistency for taxpayers in the administration and collection of land tax and emergency services levy which are both calculated based on the value and use of land.

The Bill therefore amends the ESL Act to include comprehensive administrative provisions, similar to the equivalent provisions contained in the TAA.

I will summarise some of the main changes contained in the Bill in this area.

The responsibility for the administration of the ESL Act is now placed with the Commissioner instead of the Minister which will allow the Act to be administered in a more efficient manner. By way of example, this will remove the need for the Treasurer to formally delegate powers and functions directly to staff rather than the more efficient approach of the Commissioner having this responsibility.

General refund provisions have been added to the Act which will give a legislative basis to existing administrative practice in this area and allow for equitable and consistent treatment of levy payers.

The addition of secrecy provisions will provide protection of confidential information relating to levy payers and will provide further consistency with the management of information obtained in the administration of legislation for which the Commissioner is responsible.

The amendments will also align the method for setting the rate of interest under the ESL Act to the method that will apply under the TAA. The interest rate set under the ESL Act relates to both interest imposed on unpaid levies and interest paid in cases where a levy payer is entitled to a refund of levy after a successful objection or appeal.

The ESL Act does not provide for the charging of a penalty in relation to unpaid levy and does not have provisions that allow for the investigation of unpaid levies. The addition of these provisions will allow consistency with the administration of land tax and will provide a more equitable system in respect of persons who pay the levy when it falls due and those that do not.

The Bill makes changes which will have a significant impact on the red tape faced by business and taxpayers when dealing with RevenueSA and the legislation it administers. The amendments streamline administrative provisions in a number of areas and in relation to the ESL Act, provide consistency, transparency and a legislative backing to current administrative procedures.

I commend this Bill to the House.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

This clause provides that operation of the measure is to commence on a day to be fixed by proclamation. Section 7(5) of the Acts Interpretation Act 1915 will not apply to the amending Act (in case it is necessary to delay the commencement of certain amendments beyond the second anniversary of assent).

3—Amendment provisions

This clause is formal.

Part 2—Amendment of Emergency Services Funding Act 1998

4—Amendment of section 3—Interpretation

This clause inserts three new definitions into the Emergency Services Funding Act 1998. An authorised officer is a person who is an authorised officer for the purposes of the taxation laws under the Taxation Administration Act 1996. This definition is required for the purposes of new investigation provisions to be inserted by clause 19.

A definition of Commissioner is inserted because the Commissioner of State Taxation is to be given a number of functions in relation to the administration of Part 3 Division 1 of the Act, which relates to the levy in respect of land.

Non-reviewable decision is defined by reference to new section 4, inserted by clause 5.

5—Insertion of section 4

This clause inserts a new section. Proposed section 4 explains the meaning of the term 'non-reviewable'. A number of new provisions to be inserted into the Emergency Services Funding Act 1998 as part of this measure will include a statement that a decision under the provision is a non-reviewable decision. This means that no court or administrative review body has the jurisdiction or power to entertain any question as to the validity or correctness of the decision.

6—Insertion of heading to Part 3 Division 1 Subdivision 1

This amendment is to be made because it is proposed to divide Division 1 of Part 3 of the Emergency Services Funding Act 1998, which relates to the levy in respect of land, into five Subdivisions. Provisions in the first Subdivision will deal with the imposition of the levy.

7—Amendment of section 5—Land that is subject to levy

Section 5(1) states that an emergency services levy may be assessed by the Minister against all land in South Australia in respect of each financial year. As a consequence of the amendment made by this clause, responsibility for assessing the levy will be vested in the Commissioner for State Taxation instead of the Minister.

A reference to the Local Government Act 1934 is updated so that the section refers instead to the Local Government Act 1999.

8—Amendment of section 5A—Application for aggregation of non contiguous land

The amendments made by this clause to section 5A are consequential on the Commissioner becoming responsible for assessment of the levy in respect of land.

9—Amendment of section 8—Land uses

This clause updates a definition of Local Government Regulations.

10—Amendment of section 12—Commissioner to keep assessment book

11—Amendment of section 13—Alterations to assessment book

12—Amendment of section 15—Liability for levy

The amendments made by clauses 10 to 12 are consequential on the Commissioner becoming responsible for assessment of the levy in respect of land.

13—Amendment of section 16—Notice of levy

Section 16 currently requires the Minister to serve a notice of the amount of the levy payable in respect of land for a financial year on the owner of the land. The section as amended will require the Commissioner to perform this function.

Section 16(2) lists matters that must be dealt with in the notice. Because provisions relating to interest and payment of a penalty levy are to be inserted into the Act, this clause amends subsection (2) by making it a requirement that the notice state the amount of any interest or penalty levy payable by the person.

14—Substitution of section 17

This clause deletes section 17 and substitutes a number of new clauses.

17—Refund resulting from assessment

Under this proposed section, the Commissioner is required to refund the amount of any overpayment that is revealed by an assessment of a person's liability to pay a levy or other amount under Division 1.

17A—Cancellation of assessment

This section authorises the Commissioner to cancel an assessment that has been made in error.

17B—Payment of levy into Fund

Section 17B is the same as current section 22, which is repealed by clause 19. The section has been moved so that it appears in new Subdivision 1 of Part 3 Division 1. The section as recast refers to interest and the penalty levy as well as the levy. The new section also provides for payment of any refund payable under the Division from money received in payment of the levy, a penalty levy or interest.

Subdivision 2—Refunds

17C—Right to apply for refund

Under this new section, a person may apply for a refund of an amount overpaid by the person. An application cannot be made more than five years after the person made the payment to the Commissioner.

If the result of determination of an application is that there has been an overpayment, the Commissioner must refund the amount of the overpayment.

17D—Form of application for refund

This section provides that an application for a refund must be made to the Commissioner in a form approved by the Commissioner.

17E—Commissioner may refuse to determine application until information etc provided

If a requirement has been made of an applicant for a refund under new Subdivision 5, which includes provisions relating to investigation, the Commissioner may refuse to determine the application until the applicant complies with the requirement. Such a refusal is a non-reviewable decision.

17F—Offset of refund against other liability

The whole or a part of an amount required to be refunded may be applied to meet an amount payable by the applicant or credited (with the applicant's consent) towards his or her future liability.

A decision under section 17F is non-reviewable.

17G—Windfalls—refusal of refund

Under this section, the Commissioner may refuse to make a refund if the amount of the levy, penalty levy or interest to be refunded has been passed on to some other person and the applicant has not reimbursed the other person for the amount passed on. A decision under the section is non-reviewable.

Subdivision 3—Interest and penalty levy

17H—Definition for Subdivision

This section provides a definition of deliberate default, a term used in new sections 17K and 17L. A deliberate default is a default to which Subdivision 3 applies (see below) that wholly or partly consists of or results from a deliberate act or omission by the person liable to pay the levy or a person acting on his or her behalf. The term includes a default to which the Subdivision applies where the person liable to pay the levy, or a person acting on his or her behalf, deliberately failed to provide information to the Commissioner, or deliberately misinformed or misled the Commissioner, in relation to the person's liability to pay the levy.

17I—Defaults to which Subdivision applies

Subdivision 3 applies to a default consisting of a failure by a person to pay the whole or part of a levy that the person is liable to pay under Part 3 Division 1.

17J—Interest

Section 17J provides for the payment of interest where a default to which the Subdivision applies occurs or a person fails to pay a penalty levy.

If the amount of interest payable for the time being would be less than $20, no interest is payable. The section authorises the Commissioner to remit interest payable by any amount. A decision of the Commissioner to remit an amount of interest is non-reviewable.

The applicable interest rate is the sum of the market rate and 8% per annum. The market rate is defined in section 26 of the Taxation Administration Act 1996.

17K—Penalty levy

Under this section, a penalty levy is payable when a default to which Subdivision 3 applies occurs. The penalty levy is payable by the person in default in addition to the amount of the unpaid levy.

If the Commissioner is satisfied that the default was not a deliberate default and did not result, wholly or partly, from a failure by the person, or a person acting on his or her behalf, to take reasonable care to comply with the requirements of the Act, a penalty levy is not payable.

If the amount of a penalty levy payable would be less than $20, no penalty levy is payable. The Commissioner may remit a penalty levy otherwise payable by any amount. A decision to remit a penalty levy is non-reviewable.

17L—Amount of penalty levy

The amount of a penalty levy payable in respect of a deliberate default is 75% of the amount of the levy unpaid. The amount of a penalty levy in any other case is 25% of the amount of the levy unpaid.

17M—Notification of penalty levy and interest and time for payment

Section 17M requires the Commissioner to serve notice of any interest accrued and any penalty levy payable on the person liable to pay the interest or levy. A penalty levy is to be paid by the person within a time specified in the notice. If the person fails to pay the whole or a part of a penalty levy within the specified period, the Commissioner may then serve on the person notice of interest accrued in respect of the failure.

Subdivision 4—Collection of levy

17N—Definition for Subdivision

In Subdivision 4, levy includes a penalty levy and interest.

17O—Recovery of levy as debt

Under section 17O, the Commissioner may recover the amount of an unpaid levy as a debt from the person liable to pay the amount.

17P—Joint and several liability

If two or more persons are jointly or severally liable to pay a levy, the Commissioner may recover the whole of the levy from them, or any of them, or any one of them.

17Q—Collection of levy from third parties

This section authorises the Commissioner to require the following third parties to pay an unpaid levy:

a person from whom money is due or accruing or may become due to the person in default;

a person who holds or may subsequently hold money for or on account of the person in default;

a person who holds or may subsequently hold money on account of some other person for payment to the person in default;

a person having authority from some other person to pay money to the person in default.

The section sets out requirements in relation to the written notice to be served on a third party required by the Commissioner to make a payment under the section.

17R—Duties of agents, trustees etc

Section 17R sets out a number of provisions that apply in relation to a person who has possession, control or management of a business or property of another person as an agent or trustee (or in any other capacity) if obligations under Division 1 remain undischarged by the other person or will arise in relation to the business or property. The provisions that apply are as follows:

the person must, as soon as and so far as is practicable, ensure that the obligations of the other person that remain undischarged are discharged;

the person must, as soon as and so far as is practicable, ensure that all further obligations that arise under Division 1 in relation to the business or property are discharged while the person continues to have possession, control or management of the business or property;

for those purposes the person must set aside (and, so far as necessary, liquidate) assets of the other person (or the other person's estate) to the value of any levy that has become or becomes payable and employ those assets in payment of the levy;

if the person fails, without the Commissioner's written permission, to set aside, liquidate and employ sufficient assets for that purpose, the Commissioner may recover from the person as a debt the whole or a part of an amount that is assessed as being payable under this Division in relation to the business or property and remains unpaid, but the person will not otherwise be personally liable for the payment of the levy;

the person is entitled to be indemnified by the other person (or out of the other person's estate) in respect of payments made or action taken under section 17R;

nothing prevents the making of a payment to the person out of the assets, in priority to a levy, of any reasonable remuneration, charges and expenses to which the person would, apart from section 17R, be entitled in respect of the performance of the person's functions.

15—Amendment of section 18—Levy first charge on land

This amendment is consequential on the insertion of section 17N, which includes a definition that applies for the purposes of Subdivision 4.

16—Repeal of section 19

Section 19, which authorises the Minister to require a lessee or licensee of land to pay rent or other consideration to the Minister in satisfaction a liability for the levy in respect of the land, is redundant because of the insertion of section 17Q and is therefore to be repealed.

17—Amendment of section 20—Sale of land for non-payment of levy

The amendments made by this clause are consequential.

18—Amendment of section 21—Recovery of levy not affected by objection, review or appeal

Section 21 provides that the right to recover a levy is not suspended by an objection, review or appeal in respect of a valuation or the attribution of a particular land use to land.

The section currently provides that interest accrues on an amount to be refunded, and on an unpaid amount, in accordance with the regulations. The section as amended will set out the manner in which interest accrues and the interest rates applicable in respect of refunds and amounts payable.

19—Substitution of section 22

This clause repeals section 22, which is recast and inserted into Subdivision 1 as section 17B, and substitutes a number of new provisions. The clause adds two new Subdivisions to Division 1. The first relates to investigations while the second includes secrecy provisions.

22—Arrangements for payment of levy

Under new section 22, the Commissioner may extend the time for payment of a levy and may accept the payment of a levy by instalments. A decision of the Commissioner under the section may be subject to conditions.

22A—Decisions non-reviewable

This section provides that a decision under Subdivision 4 is non-reviewable.

22B—No statute of limitation to apply

This section provides that actions and remedies for recovery by the Commissioner of amounts assessed as being payable under Division 1 are not barred or affected by any statute of limitations.

Subdivision 5—Investigation

22C—Power to require information, instruments or records or attendance for examination

Under this new section, the Commissioner may, for a purpose related to the administration or enforcement of Division 1, require a person to provide information, attend and give evidence or produce an instrument or record. The Commissioner's request must be made by written notice.

A person who, without reasonable excuse, refuses or fails to comply the requirements of a notice, or to comply with any other requirement of the Commissioner as to the giving of evidence, is guilty of an offence. The maximum penalty is $10 000.

A requirement under the section is a non-reviewable decision.

22D—Powers of entry and inspection

This section sets out a number of powers that may be exercised by authorised officers for purposes related to the enforcement of Division 1. An authorised officer may—

enter and remain on premises; and

require a person on the premises to answer questions or otherwise furnish information; and

require a person on the premises to produce any instrument or record in the person's custody or control (including a written record that reproduces in an understandable form information stored by computer, microfilm or other means or process); and

require the owner or occupier of the premises to provide the authorised officer with such assistance and facilities as is or are reasonably necessary to enable the authorised officer to exercise powers under the Subdivision; and

seize and remove any instrument or record on behalf of the Commissioner.

22E—Use and inspection of instruments or records produced or seized

An instrument or record produced to the Commissioner or seized and removed by an authorised officer may be retained for the purpose of enabling the instrument or record to be inspected and enabling copies of, or extracts or notes from, the instrument or record to be made or taken by or on behalf of the Commissioner.

An instrument or record required as evidence may be retained until relevant proceedings are finally determined.

22F—Self-incrimination

Section 22F provides that a person is not excused from answering a question, providing information or producing an instrument or record, when required to do so under Subdivision 5, on the ground that to do so might tend to incriminate the person or make the person liable to a penalty.

However, the section also provides that if the person objects to answering the question, providing the information or producing the instrument or record on that ground, the answer, information, instrument or record is not admissible against the person in criminal proceedings. The exceptions to this rule are proceedings for an offence with respect to false or misleading statements, information or records and proceedings for an offence in the nature of perjury.

22G—Hindering or obstructing authorised officers etc

Section 22G makes it an offence for a person to hinder or obstruct an authorised officer in the exercise of a power under Subdivision 5. It is also an offence for a person to, without reasonable excuse, refuse or fail to comply with a requirement of an authorised officer under the Subdivision. The maximum penalty is a fine of $10 000.

However, for a person to be guilty of an offence arising from the entry of an authorised officer onto premises, it must be established that the officer identified himself or herself as an authorised officer and warned the person that a refusal or failure to comply with the requirement constituted an offence.

Subdivision 6—Secrecy

22H—Relevant persons

Section 22H provides a definition of relevant person that applies for the purposes of Subdivision 6. A relevant person is a person who is or has been engaged in the administration or enforcement of Division 1.

22I—Prohibition of certain disclosures by relevant persons

This section prohibits a relevant person from disclosing information obtained under or in relation to the administration or enforcement of Division 1 except as permitted by Subdivision 6. The maximum penalty for a breach of the section is a fine of $10 000.

22J—Permitted disclosure in particular circumstances or to particular persons

Section 22J provides that a relevant person may disclose information obtained under or in relation to the administration of Division 1 in the following circumstances:

with the consent of the person to whom the information relates or at the request of a person acting on behalf of the person to whom the information relates;

in connection with the administration or enforcement of Division 1, a taxation law (within the meaning of the Taxation Administration Act 1996), the Petroleum Products Regulation Act 1995, the First Home Owner Grant Act 2000 or a law of another Australian jurisdiction relating to taxation; or

for the purposes of legal proceedings under a law referred to above or reports of such proceedings; or

to the holder of an office or a body prescribed for the purposes of section 78(d) of the Taxation Administration Act 1996.

22K—Permitted disclosures of general nature

This section authorises the Commissioner to disclose information obtained under or in relation to the administration or enforcement of Division 1 that does not directly or indirectly identify a particular person.

22L—Prohibition of disclosures by other persons

This section prohibits the disclosure of information by a person other than a relevant person. The person cannot disclose information obtained from a relevant person that the relevant person obtained under or in relation to Division 1 unless—

the disclosure is of a kind that a person engaged (whether as an officer or employee or otherwise) in the administration or enforcement of this Act would be permitted to make under Subdivision 6; or

if the person is the holder of an office or a body prescribed for the purposes of section 78(d) of the Taxation Administration Act 1996—the disclosure is made in connection with the performance of functions conferred or imposed on the person under a law of this jurisdiction or another Australian jurisdiction (including for the purposes of legal proceedings connected with the performance of such functions); or

the disclosure is made with the consent of the Commissioner.

22M—Restriction on power of courts to require disclosure

This section provides that a court does not have power to require a disclosure of information contrary to Subdivision 6.

20—Amendment of section 27—Payment of levy into Fund

Section 27 provides that money received in payment of the levy in respect of vehicles and vessels must be paid into the Fund. The section as amended will add an exception so that money received in payment of the levy can be applied towards payment of any refund required to be paid under Division 2 instead of being paid into the Fund.

21—Substitution of section 31

This clause deletes the existing delegation provision and substitutes a new section that refers to the Commissioner as well as the Minister. The new section also authorises the subdelegation of a delegated power, function or duty.

This clause also inserts a new evidentiary provision. Section 31A applies section 115 of the Taxation Administration Act 1996 for the purposes of the Emergency Services Funding Act 1998.

22—Amendment of section 32—Service of notices

23—Amendment of section 33A—Recouping money lost on aggregation of non contiguous land

The amendments made by clauses 22 and 23 are consequential on the Commissioner being given administrative functions in relation to the levy on land.

Part 3—Amendment of Land Tax Act 1936

24—Amendment of section 11—Minimum tax

Section 11 of the Land Tax Act 1936 currently provides that if the total amount of land tax payable by a taxpayer in respect of a year would, apart from the section, be less than $10, no land tax is payable. This clause amends section 11 by changing the relevant amount to $20.

Part 4—Amendment of Pay-roll Tax Act 1971

25—Amendment of section 9 —Imposition of pay-roll tax on taxable wages

This clause amends section 9 of the Pay-roll Tax Act 1971 by removing references to rates of pay-roll tax that no longer apply.

26—Amendment of section 11A—Deduction from taxable wages

This clause amends section 11A of the Pay-roll Tax Act 1971 by removing references to prescribed amounts in respect of taxable wages that no longer apply.

27—Amendment of section 12—Exemptions

Clause 27 amends outdated references and removes some obsolete provisions.

28—Amendment of section 13A—Meaning of prescribed amount

The definition of financial year in section 13A is replaced so as to remove redundant historical information. Other redundant provisions are also deleted by this clause.

29—Amendment of section 18K—Interpretation

This clause substitutes a new definition of financial year so as to remove redundant historical information. Other provisions that no longer have any application are also removed by this clause.

Part 5—Amendment of Stamp Duties Act 1923

30—Amendment of section 2—Interpretation

This clause deletes a number of redundant definitions and amends other definitions to remove redundant references. The definition of adhesive stamp is to be removed by this clause.

31—Amendment of section 6—Denotation of duty

This clause removes a provision that refers to the denotation of duty by an adhesive stamp and is therefore no longer required.

32—Amendment of section 11—Appropriate stamp to be used

This clause removes a provision that relates to the denotation of duty by an adhesive stamp and is therefore no longer required.

33—Repeal of section 12

Section 12 deals only with adhesive stamps and is therefore repealed by this section.

34—Amendment of section 20—Time for payment of duty and stamping

Section 20(5) of the Stamp Duties Act 1923 is recast so as to remove a redundant paragraph.

35—Repeal of section 29

Section 29, which provides that duty on an agreement not under seal may be denoted by an adhesive stamp, is repealed by this clause.

36—Amendment of section 60B—Refund of duty where transaction is rescinded or annulled

This clause removes a redundant provision from section 60B of the Stamp Duties Act 1923.

37—Amendment of section 71—Instruments chargeable as conveyances

This clause removes a reference in section 71 to section 90D because that section is to be repealed by clause 39.

38—Repeal of section 81A

Section 81A is another section that is relevant solely in relation to adhesive stamps and is therefore repealed by this clause.

39—Substitution of Part 3A

This clause repeals Part 3A, which consists of special provisions relating to financial products, and substitutes a new Part that retains only those sections of the existing Part that continue to be relevant.

Part 3A—Special provisions relating to financial products

83—Interpretation

New section 83 is based on current section 90A, with all redundant definitions having been removed.

84—Share buy-back

New section 84 is in the same terms as current section 90AB.

85—Exempt transactions

Section 85 provides that no duty is payable under the Act in relation to an exempt transaction. Exempt transaction is defined in section 83 to mean a conveyance (including a sale or purchase) of a quoted financial product made after 30 June 2001.

86—Financial products liable to duty

This section is in the same terms as current sections 90T and 90U.

Section 86 applies to a conveyance or conveyance on sale of a financial product only where—

the financial product is—

a financial product of a company that, under the Corporations Act 2001 of the Commonwealth, is taken to be registered in South Australia; or

a financial product of a foreign company; or

a unit of a unit trust scheme; and

the conveyance is not an exempt transaction.

Section 86 provides that a conveyance or conveyance on sale of a financial product to which the section applies is only liable to duty if the financial product is—

a financial product of a relevant company; or

a unit of a unit trust scheme the principal register of which is situated in South Australia; or

a unit of a unit trust scheme in relation to which no register exists in Australia and—

having as the manager of the scheme a relevant company or a natural person principally resident in South Australia; or

not having a manager but with a trustee that is a relevant company or a natural person principally resident in South Australia.

87—Proclaimed countries

Section 86 operates subject to this section. Under section 87, no duty is payable in respect of a conveyance or conveyance on sale of a financial product that is registered on a register kept within a proclaimed country. The section further provides that the Governor may, by proclamation, declare any country to be a proclaimed country.

Section 87 does not operate to exempt a transaction from duty under Part 4 of the Act (Land Rich Entities).

88—Transfer of financial products not to be registered unless duly stamped

This section is in substantially the same terms as current section 106A (to be repealed by clause 41), though certain changes have been made to take into account amendments made as part of this measure.

The section provides that a transfer of a financial product to which section 86 applies must not be registered by the corporation, company or society by which the financial product was issued—

unless a proper instrument of transfer has been delivered to the corporation, company or society in which, in the case of a transfer by way of sale, the consideration for the financial product is expressed in terms of money and the actual date of sale and the date or dates of execution by the transferor and transferee are set out; and

unless the instrument is duly stamped under this Act or is taken to have been duly stamped.

If financial products are transferred pursuant to a takeover scheme, the Commissioner may, on payment of the duty payable in respect of the instruments of transfer, denote payment of the duty on a statement in the approved form. If payment of duty is denoted on a statement, each instrument of transfer to which the statement relates will be taken to have been duly stamped.

After a transfer of a financial product has been registered by the corporation, company or society in this State, the instrument of transfer must be retained in this State by the corporation, company or society for a period of not less than five years.

If a corporation, company or society contravenes or fails to comply with a provision of the section, the corporation, company or society is guilty of an offence and liable to a maximum penalty of $10 000.

40—Amendment of section 106—Spoiled or unused stamps

This clause amends section 106 by inserting definitions of stamp and stamped. These definitions are necessary to make it clear that those terms when used in section 106 refer to unused adhesive stamps issued before the commencement of this measure.

41—Repeal of section 106A

Section 106A is repealed. New section 88, to be included in Part 3A (inserted by clause 39), is in substantially the same terms as section 106A.

42—Repeal of section 109

Section 109 prescribes a penalty for offences relating to misuse of adhesive stamps. The section also imposes a penalty in respect of fraudulent acts committed with the intention of evading duty payable under the Act.

The section is redundant because the offences relating to adhesive stamps are no longer required and it is an offence under section 59 of the Taxation Administration Act 1996 for a person to evade or attempt to evade tax by a deliberate act or omission.

43—Amendment of section 112—Regulations

This clause revises and updates the regulation making power of the Act. Subsection (3), which requires regulations under the Act to be laid before Parliament immediately or within 30 sitting days, is removed so that section 10 of the Subordinate Legislation Act 1978 applies. That section requires that regulations be laid before each House of Parliament within six sitting days.

44—Amendment of Schedule 2—Stamp duties and exemptions

Schedule 2 of the Stamp Duties Act 1923 sets out rates of duty and lists some exemptions from specific types of duty. This clause amends Schedule 2 by removing exemptions that are no longer required and updating obsolete references.

Part 6—Amendment of Taxation Administration Act 1996

45—Amendment of section 3—Interpretation

This clause inserts a number of new definitions into the interpretation provision of the Taxation Administration Act 1996.

Recognised jurisdiction means the Commonwealth, another State or a Territory. Corresponding Commissioner is defined in relation to a recognised jurisdiction in which a corresponding law is in force and means the person responsible for administering the corresponding law or a person holding a position in the administration of that corresponding law which corresponds to the position of the Commissioner of State Taxation. A corresponding law is a law of a recognised jurisdiction that—

corresponds to a taxation law; or

is declared by the Governor to be a law corresponding to a taxation law.

46—Amendment of section 26—Interest rate

This clause amends the definition of market rate in section 26 of the Act. The definition currently refers to the rate applicable from time to time under section 214A(8) of the Income Tax Assessment Act 1936. As amended, the definition will refer, in relation to interest accruing at any time during a particular financial year, to the average rate of the daily 90-day Bank Accepted Bill Rate prescribed by the Reserve Bank of Australia for the month of May preceding the financial year (rounding up 0.005 to 2 decimal places).

47—Amendment of section 63—Commissioner may perform functions under laws of other jurisdictions

Section 63 as amended by this clause will authorise the Commissioner to perform functions on behalf of a corresponding Commissioner.

48—Amendment of section 66—Delegation by Commissioner

This clause amends section 66 to authorise the Commissioner to delegate any of his or her powers or functions under the Taxation Administration Act 1996 to a corresponding Commissioner for the purposes of a corresponding law. The section as amended also provides that a corresponding Commissioner may make a further delegation if the instrument of delegation so provides.

49—Repeal of section 69

Section 69 of the Taxation Administration Act 1996, which deals with the personal liability of taxation officers, is no longer required and is therefore repealed by this clause. The section is not required because section 74 of the Public Sector Management Act 1995 provides an immunity from civil liability for public sector employees.

50—Insertion of Part 9 Division 2A

This clause inserts a new Division dealing with investigations under corresponding laws.

Division 2A—Investigations under other laws

76A—Investigations for the purposes of corresponding laws

Section 76A authorised the Commissioner, by agreement with a corresponding Commissioner of a recognised jurisdiction, to—

authorise the corresponding Commissioner to perform or exercise a function or power under the Division of the Act relating to investigation (Part 9 Division 2) for the purposes of a corresponding law in force in the other jurisdiction; or

perform or exercise a function or power under that Division on behalf of a corresponding Commissioner for the purposes of a corresponding law in force in the other jurisdiction.

The new section also includes necessary interpretation provisions.

76B—Investigations in other jurisdictions for the purposes of taxation laws

Under new section 76B, the Commissioner may enter into an agreement or arrangement with a corresponding Commissioner to enable the performance or exercise, by or on behalf of the Commissioner, of investigative functions and powers conferred under a corresponding law for the purposes of a taxation law. The Commissioner may also authorise a person who is authorised to perform or exercise a function or power under Part 9 Division 2 to perform or exercise investigative functions or powers conferred on the person by a corresponding law for the purposes of a taxation law.

76C—Instrument of delegation to be produced

This section imposes a requirement on a person exercising a power under the Division under delegation to produce a copy of the instrument of delegation if requested to do so.

51—Insertion of section 76D

This clause amends Part 9 Division 3 of the Taxation Administration Act 1996 by the insertion of a new interpretation provision. The new section provides that a reference in Division 3 to a taxation law will be taken to include a reference to a corresponding law. The purpose of the amendment is to ensure that the secrecy provisions apply in relation to corresponding laws in addition to taxation laws.

52—Amendment of section 78—Permitted disclosure in particular circumstances or to particular persons

This clause makes a some consequential amendments to section 78. The clause also updates an incorrect reference.

53—Amendment of section 80—Prohibition of disclosure by other person

The purpose of this amendment is to make it clear that section 80(d) refers to offices or bodies prescribed for the purposes of section 78(d).

Part 7—Repeal of Taxation (Reciprocal Powers) Act 1989

54—Repeal of Act

This clause repeals the Taxation (Reciprocal Powers) Act 1989.

Debate adjourned on motion of Hon. J.M.A. Lensink.

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