Page 3411 - Week 11 - Tuesday, 14 November 2006
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will have abolished seven business taxes over the 10-year period to 2010. They are the financial institutions duty in 2001, duty on quoted marketable securities in 2001, debits tax in 2005, duty on non-real core business assets in 2006, duty on rental arrangements in 2007, lease duty in 2009 and duty on unquoted marketable securities in 2010.
Providing legislation in advance of the abolition of the final three taxes will provide certainty to taxpayers. This advanced notice will enable them, and in some cases their clients, to adjust contracts, business practices and computer systems to accommodate the changes. The transitional provisions in the bill will ensure that all taxpayers are treated consistently, equitably and fairly, both before and after the abolition of each tax. To ensure that taxpayers properly discharge their liabilities, the executive may make transitional regulations if they consider a matter is not, or is not adequately or appropriately, dealt with in the transitional chapter.
Over the years there has been much discussion leading up to the abolition of these business taxes, so I will confine my comments now to a summary of the effect of the bill on duty liability. Chapter 6 of the Duties Act will expire on 30 June 2007 and all obligations will cease for any liability for hiring duty incurred after that date. Chapter 5 of the Duties Act will expire on 30 June 2009 and duty on leases executed after that date will cease. Provisions relating to duty on the transfer of shares and units in a unit trust scheme will expire on 30 June 2010 and duty on unquoted marketable securities transactions made after that date will cease.
I would like to point out that there are two cases where the transfer of unquoted marketable securities will continue to trigger transactions that will remain liable to duty. This will be so even though the transfer of the underlying shares and units will no longer be dutiable in their own right. This prevents the avoidance of duty where there are transfers of control over land without an actual transfer of land. The first case is where duty know as “land-rich” is imposed on the transfer of certain interests in landholders in the ACT. The second is where the acquisition of shares and/or units gives an entitlement to occupy land known as a land use entitlement.
This bill moves some definitions to the dictionary to allow for the future expiry of chapters 5 and 6, and omits other redundant provisions at the various abolition dates. There is also a new requirement to provide an acquisition statement within 90 days of the transfer of marketable securities where the acquisition triggers a “land-rich” duty liability.
Mr Speaker, I will not go back to the detail of the comments I made when this bill was introduced some little while ago, but I know—and, indeed, this was commented on by the shadow Treasurer—that the relationship between these amendments and the removal of these taxes and the GST is, of course, real. In the intergovernmental agreement underpinning the introduction of the GST the states and territories agreed to cease the application of certain business taxes. We have quite rigorously and fully complied with the intergovernmental agreement, as have the other states and the Northern Territory, as it relates to the removal of these taxes.
To the extent that the states and territories should bow down and thank the commonwealth for its generosity in delivering GST revenue to them as if it were
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