The Minister for Revenue and Assistant Treasurer, Peter Dutton, today introduced Tax Laws Amendment (2007 Measures No. 6) Bill 2007 which implements a number of improvements to Australia’s taxation system, including the following:
Capital expenditure for the establishment of trees in carbon sink forests
The Government recognises the role that forests can play in reducing Australia’s greenhouse gas emissions. Forests act as carbon sinks by absorbing carbon dioxide from the air and storing it as carbon in their woody tissues.
The Government will support carbon sink forest operators by allowing them to claim a tax deduction for the cost of establishing trees in a qualifying carbon sink forest.
For a five year period from 1 July 2007, an immediate deduction will be allowed for costs incurred in establishing trees in a qualifying carbon sink forest. From 2012-13 the immediate deduction will be replaced with a write-off under the general horticultural plant provisions.
To be eligible for tax deductibility, carbon sink forest operators must also demonstrate that their projects comply with environmental and natural resource management guidelines.
The Government is currently developing standards for robust and transparent offsets to be accredited for use in the Australian Emissions Trading System. A discussion paper on incentives for abatement, including carbon offsets, will be issued in September 2007.
Tobacco industry exit grants
This Bill will assist tobacco growers affected by the withdrawal of manufacturers from the tobacco market in Australia.
Tobacco growers who undertake not to carry on any agricultural enterprise for at least five years will be exempt from tax on grants received under the Tobacco Growers Adjustment Assistance Programme 2006.
Deductible gift recipients
The Bill will update the list of deductible gift recipients (DGRs) to include the Council for Jewish Community Security from 10 August 2007 and extend the DGR listing of Australia for the United Nations High Commissioner for Refugees until 27 June 2012.
Farm management deposits (FMDs)
This Bill makes minor changes to the early access provisions to the FMD scheme. In particular, the Bill will allow eligible primary producers to retain their tax benefit when they withdraw from their FMD within 12 months. At the time of the withdrawal, primary producers must be eligible for an exceptional circumstances certificate from the Secretary of the Department of Human Services and an exceptional circumstances declaration must not be in force when the FMD is made.