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Legislative Assembly for the ACT: 1997 Week 3 Hansard (10 April) . . Page.. 836 ..

MRS CARNELL (continuing):

Another avenue of exemption is provided by way of excluded debits. These include debits to an account of a charitable organisation, certain hospitals, universities, colleges and schools. To qualify for relief from debits tax by way of excluded debits, such organisations must hold an account with an ACT financial institution on which the Commissioner for ACT Revenue has issued an exemption certificate. Under the Debits Tax Act an exemption certificate will be issued only if the commissioner is satisfied that the only debits to the account will be exempt or excluded debits.

As a special method of assistance, the Bill contains a transitional provision which will allow customers of financial institutions who are eligible to hold an account exempted from debits tax to complete a declaration to this effect and have it processed prior to the commencement of the Act. Subject to the Commissioner for ACT Revenue approving the declaration and it being processed by the relevant financial institution, it will allow an account to be exempted from the date of commencement of the Act.

Mr Speaker, while financial institutions and the account holder are jointly and severally responsible to pay the tax, it is usual practice for the financial institution to pay the tax and pass it on to the account holder. The Bill provides for financial institutions to be able to legally recover the amount of tax paid from the account holder. Debits tax rates are as follows: Not less than $1 but less than $100, 30c; not less than $100 but less than $500, 70c; not less than $500 but less than $5,000, $1.50; not less than $5,000 but less than $10,000, $3; and $10,000 or more, $4.

Mr Speaker, concurrently with the implementation of the debits tax, the FID rate will be lowered to 0.06 per cent of dutiable receipts. This will result in FID charges in the ACT being the same as those in New South Wales and most other FID jurisdictions and will be welcomed by ACT residents and businesses.

The Government is conscious of the financial impact that the debits tax may have on pensioners of limited income. Accordingly, the Bill also includes a provision which provides for social security and veterans' affairs pensioners, such as the aged, disabled, sole parents, carers and widows, to apply to the Commissioner for ACT Revenue for a rebate of debits tax paid during a financial year. If a pensioner withdraws money three times a week the estimated debits tax will be about $46.80 per year. To minimise this impact it is proposed that, as long as the debits tax paid by eligible pensioners exceeds $15 in the financial year, they will be able to make application for a rebate of the tax paid up to a maximum of $50. This concession indicates the Government's commitment to help minimise the tax impact on persons of limited income.

With the introduction of debits tax in the ACT, compliance costs of financial institutions should be reduced because of its common collection across all jurisdictions. Further, having debits tax and FID charges the same as New South Wales should reduce tax avoidance practices that occur across State and Territory borders where differences in financial taxes exist. The provisions of the Taxation (Administration) Act 1987 will also be applicable to the Debits Tax Act. These include administrative arrangements, tax assessments, penalties, anti-avoidance measures and the right of objection and appeal against decisions made by the Commissioner for ACT Revenue.

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