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Further complications with new sales tax system - Lloyd

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B ruce L loyd Deputy Leader, National Party of Australia Shadow Minister for Primary Industry

M edia Ph: 06/2774193 Fax:06/2772053


Labor's so-called "Sales Tax Simplification" package continues to reveal new complications which make a mockery of claimed benefits, according to National Party Acting Leader and Shadow Minister for Primary Industry, Bruce Lloyd.

Mr Lloyd said the latest defect detected in the legislation meant farmers in many circumstances would be caught in a protracted investigation of their entitlement to claim a sales tax exemption.

The following situation will be common for farmers:

A machinery repairer who deals with both farmers and non-exempt businesses purchases a set of gears to recondition a tractor gearbox, not knowing who the buyer will be. He pays sales tax when he buys it from the retail wholesaler, but the amount of sales tax is not recorded because he is not an exempt purchaser.

A farmer wants to buy the gearbox and correctly claims exemption from sales tax. However, the repairer does not know how much he paid and legally is not allowed to discount the price and claim a rebate for the parts used in the gearbox. He must contact the retail wholesaler and find out the amount paid and inform the farmer, who must then claim the rebate from the Tax Office.

So much for simplicity.

Mr Lloyd said modifications to the iniquitous Wholesale Sales Tax system had been a shambles since their conception and would be a serious burden for the businesses they were supposed to assist.

Mr Lloyd said it was also absurd for the Tax Office to be planning to conduct sales tax seminars to explain the new rules two months after they were introduced.

The ATO is planning to run these seminars for sales tax taxpayers, retailers, tax agents and primary producers in February and March throughout Victoria.

"The problem is that these people are expected to deal with the new system from January 1. Does the Tax Office expect them to guess the arrangements in the mean time?"

Mr Lloyd said the Tax Office's apparent incompetence in implementing the new rules stemmed directly from the fact that Labor's legislation was hopeless and placed impossible demands of tax administrators. .../2


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The ΑΤΟ failed to provide thousands of primary producers with details and registration forms for the new sales tax system and was forced to extend the deadline for registration by a month to December 31.

"The upshot of this is that from January 1 the Tax Office will run two systems concurrently, using the old method of sales tax exemption certificates for several months while the new system of exemption numbers is finalised.

"This is the only way Labor can guarantee farmers won't suddenly by hit by sales tax. It is messy, complicated and guaranteed to cause confusion in the bush."

Mr Lloyd said he had already revealed several cases where farmers and other people involved in the rural industries would be disadvantaged by changes to Labor's draconian sales tax legislation.

• the imposition of 20 per cent sales tax on bogie drive grain trucks used by farmers

• the removal of the exemption for processed stock feed used as feed for * livestock, including racehorses, except for registered primary producers

END 11/12/92