The Minister for Revenue and Assistant Treasurer today introduced legislation to implement a range of changes and improvements to Australia’s taxation system. This Bill will amend the taxation laws to:
Deter the promotion of tax avoidance and evasion schemes:
These measures give effect to the Government’s commitment to introduce civil penalties and other remedies to deter the promotion of tax avoidance and tax evasion schemes, while allowing flexibility for legitimate tax planning. Legitimate tax effective investments, including schemes that have a Product Ruling from the Commissioner of Taxation and are implemented in accordance with that ruling, will not be at risk under the regime.
The framework provides a combination of preventative measures and deterrents. Under previous legislative arrangements, promoters of tax exploitation schemes were not penalised when taxpayers incurred penalties for their involvement in tax avoidance and tax evasion schemes.
There has been extensive consultation with industry and the tax professionals in developing the legislation.
From 1 July 2005, provide a systematic treatment for business ‘blackhole’ expenditures comprising:
- a new five-year write-off for business capital expenditure not recognised elsewhere in the tax law. This includes pre- and post-business expenses;
- expanding the cost base and reduced cost base for capital gains tax (CGT) assets;
- expanding the elements of cost for depreciating assets; and
- a new five-year write-off for lease and licence surrender payments incurred in carrying on or in ceasing a business.
The goods and services tax (GST) and phone vouchers:
The Government will give effect to its announcement in the 2005-06 Budget that it will amend the vouchers provisions in the GST law to clarify that prepaid phone products are treated as ‘eligible vouchers’. Under the GST law, these vouchers are taxed on redemption rather than on their sale. This will have effect from 1 July 2000.
Enhance the foreign income tax exemption for temporary residents:
The Treasurer announced several improvements to this measure to make it more effective and to significantly reduce administrative and compliance costs – for more information see the Treasurer’s press release.