Page 984 - Week 04 - Thursday, 18 June 1992
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This Bill amends the Stamp Duties and Taxes Act 1987. Madam Speaker, on 6 June 1990 the Assembly agreed to the Stamp Duties and Taxes (Amendment) Act 1990, which imposed, from 1 July 1990, a liability for tax on licensed motor vehicle dealers for all sales of motor vehicles made by them. With the introduction of the tax the Motor Trades Association raised a number of concerns. Some of these concerns have subsequently been addressed through administrative arrangements; for example, clarification of what accessories or associated costs should be included or excluded by dealers when determining the purchase price or market value of a motor vehicle for duty purposes. However, four issues raised by the Motor Trades Association will require amendments to the Stamp Duties and Taxes Act 1987.
The first issue, Madam Speaker, is the possible payment of double tax by non-ACT residents who purchase interstate registered vehicles from licensed motor vehicle dealers. Such transactions attract tax, payable by the dealer on the sale and included in the purchase price, and again when the purchasers subsequently transfer registration of the vehicles in their jurisdiction of residence. As well as being inequitable for purchasers, this liability to tax in two jurisdictions also disadvantages Territory dealers by discouraging interstate residents buying from ACT traders.
The second concern is the absence of a specific provision within the Act to allow licensed motor vehicle dealers to pass on tax to the purchaser. The Motor Trades Association claims that the absence of such a provision has meant that dealers are experiencing problems convincing buyers that the tax is able to be included in the purchase price to be paid by the buyer. By contrast, both the Financial Institutions Duty Act 1987 and the Stamp Duties and Taxes Act 1987, in relation to tax on insurance premiums and tax on the sale of marketable securities, have provisions which explicitly allow taxpayers to recover the tax from their clients. The Government considers that it is appropriate to include such provisions for licensed motor vehicle dealers so that the tax can be separately identified and allow purchasers to directly compare prices by ACT dealers with interstate competitors where tax is the purchaser's responsibility.
The third concern raised by the Motor Trades Association is that tax is being paid by dealers on sales of motor vehicles to the Commonwealth and ACT governments and that without a tax exemption government sales will go interstate where no tax is payable. The proposed amendment will exempt such sales from stamp duty. The final concern raised by the Motor Trades Association is the fact that no equivalent stamp duty is payable on the registration of a vehicle under the Commonwealth Interstate Road Transport Act. Unless licensed motor vehicle dealers in the Territory, liable for tax on vehicles sold by them, are exempted from duty on the sale of such vehicles, they are at a disadvantage in comparison with motor vehicle dealers in other jurisdictions. The proposed amendments will ensure that ACT dealers are not disadvantaged and remain competitive with their interstate counterparts.
Madam Speaker, representations have also been received from the Council of ACT Motor Clubs requesting exemption from stamp duty for veteran, vintage and historic vehicles and seeking concessionary registration on first registration of vehicles after restoration. Exemption from stamp duty on initial registrations is supported because it is difficult to value restored vehicles on a commercial basis and unfair to tax the owner of such vehicles according to the market value of the vehicles when it is the result of the time and expense lavished on the restoration of vehicles by the owners.
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