Mr Rocher asked the Treasurer, upon notice, on 18 June 1996:

(1) Further to his statement in answer to my question without notice concerning contingent debt (Hansard , 28 May 1996, page 1505) that the Government will make policy decisions on taxation matters, has his attention been drawn to taxation ruling SST6.

(2) Is it a fact that from 1 October 1996 major changes to the interpretation of tax laws will come into effect and that (a) goods producers, including manufacturers, goods processors and fabricators, (b) importers, (c) wholesalers, (d) retailers, (e) indirect marketers, including direct sellers, (f) end users, (g) taxpayers who sell to related entities and (h) duty free operators will be affected; if so, was the decision to make the changes taken by the current Government.

Mr Costello — The Assistant Treasurer has provided the following answer to the honourable member's question:

(1) Yes, I have received a copy of SST6 from the Australian Taxation Office (ATO). This public ruling is not a change of Government policy. The ATO in conjunction with professional bodies and taxpayer representatives has developed a comprehensive ruling to assist taxpayers to determine the taxable value of the goods they sell. The ruling deals with and provides solutions for issues affecting the calculation of taxable value of goods which is a major building block in the sales tax law. The ruling seeks to assist taxpayers by explaining the practical application of Government policy.

Next to the difficulties experienced in correctly classifying goods for sales tax purposes, determining the taxable value of goods is the most common and time consuming problem faced by both the ATO and taxpayers. For this reason publishing a public taxation ruling on taxable value was considered to be of some priority by the ATO, sales tax practitioners and large corporate taxpayers.

(2) This ruling is the result of intensive negotiations over the last 2 years with sales tax professional bodies, industry bodies and the ATO. It provides certainty and consistency through the use of Safe Harbours that can be adopted by taxpayers. These are practical guidelines to help make taxable value calculations easier and will provide clarity for taxpayers to self assess their sales tax dealings. While safe harbours are not mandatory, if taxpayers apply them and pay sales tax at the correct rate they will have met their sales tax liability for that transaction.

The ruling provides simplified methods of calculating taxable value and may reduce the cost of compliance for taxpayers who choose that option.

In conjunction with the professional bodies and the Corporate Taxpayers Association, the ATO has included processes in the ruling to manage the impact of the withdrawal of previous rulings and to give taxpayers time to consider their position. If a previous ruling conflicts with the principles in the new public ruling, it will be altered from 1 October 1996 giving taxpayers time to consider their position and to approach the ATO if their circumstances are not adequately dealt with in the ruling. If there is no conflict of principles, all private rulings issued after 30 June 1992 will cease to be effective 5 years from their date of issue.

To date the ruling has been very well received by both the practitioners and taxpayers and there have been a number of positive reports in the media.