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Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018



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ISSN 1328-8091

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BILLS DIGEST NO. 44, 2018-19 14 NOVEMBER 2018

Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018 Joseph Ayoub Law and Bills Digest Section

Contents

Purpose of the Bills ......................................................... 3

Commencement ............................................................. 3

Structure of the Bill ......................................................... 3

Background ..................................................................... 4

Black Economy Taskforce .......................................... 4

Size of the black economy ......................................... 4

Taskforce recommendations ..................................... 5

Denying a deduction to non-compliant payers ....... 5 Extending the taxable payment reporting regime ...................................................................... 6

Domestic Manufacture of Tobacco ......................... 6

Committee consideration ................................................ 6

Senate Standing Committee for the Scrutiny of Bills .............................................................................. 6

Senate Standing Committee for the Selection of Bills .............................................................................. 7

Policy position of non-government parties/independents...................................................... 7

Position of major interest groups..................................... 7

Financial implications ...................................................... 8

Schedule 1 ................................................................. 8

Schedule 2 ................................................................. 8

Date introduced: 20 September 2018

House: House of Representatives

Portfolio: Treasury

Commencement: Various dates, as set out in this Digest Links: The links to the Bills, their Explanatory Memoranda and second reading speeches can be found on the home pages for the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 and Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at November 2018.

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Schedule 3 ................................................................. 8

Statement of Compatibility with Human Rights................ 8

Parliamentary Joint Committee on Human Rights ..... 9 Key issues and provisions ................................................ 9

Schedule 1—denying a deduction to non-compliant withholders ................................................ 9

Background ................................................................ 9

Deductions ............................................................... 9

PAYG withholding .................................................... 9

Proposed changes ................................................... 10

Exceptions ............................................................... 12

Nil-amounts ........................................................... 12

Incorrectly characterising an employee as a contractor .............................................................. 12

Voluntary Notification ........................................... 13

Application .............................................................. 14

Schedule 2—extending third party reporting ........... 14 Who does it apply to? ............................................. 14

Exemptions .............................................................. 15

Proposed exemption—courier and road freight services .................................................................. 15

Proposed exemption—Security, investigation or surveillance and IT services............................... 16

What is required to be reported? ........................... 16

Application .............................................................. 17

Schedule 3—imposing excise on tobacco goods when manufactured .................................................. 17

Background and summary ...................................... 17

Application .............................................................. 18

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Purpose of the Bills The purpose of the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 (the Black Economy Bill) is to:

• amend the Income Tax Assessment Act 1997 (ITAA97) to deny an income tax deduction for certain payments where the payer has not complied with their withholding obligations

• amend Schedule 1 of the Taxation Administration Act 1953 (TAA) to introduce reporting obligations on entities that have an Australian Business Number (ABN) and provide road freight, information technology or security, investigation or surveillance services and engage other entities to perform those services on their behalf and

• amend the Excise Act 1901 to establish a framework to make excise duty on tobacco due and payable at the time of manufacture rather than being subject to deferral arrangements.

The purpose of the Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018 (the Tobacco Duties Bill) is to amend the Excise Tariff Act 1921 and its Schedule to enable the calculation of excise on tobacco products manufactured in Australia under the proposed new framework established by Schedule 3 to the Black Economy Bill.

In this Bills Digest the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 is referred to as ‘the Black Economy Bill’ and the Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018 is referred to as ‘the Tobacco Duties Bill’. The phrase ‘the Bills’ is used when they are referred to together.

Commencement The Black Economy Bill commences as follows:

• Sections 1 to 3 commence on Royal Assent

• Schedule 1 and Schedule 3 commence on the first 1 January, 1 April, 1 July or 1 October to occur after the day of Royal Assent and

• Schedule 2 commences on the later of:

- the first 1 January, 1 April, 1 July or 1 October to occur after the day of Royal Assent and - immediately after the commencement of Schedule 2 to the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018—Schedule 2 to this Act commenced on 4 October 2018. The Tobacco Duties Bill commences as follows:

• Sections 1 to 3 commence on Royal Assent and

• Schedule 1 commences at the same time Schedule 3 to the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Act 2018 commences.

Structure of the Bill The Black Economy Bill is divided into three Schedules:

• Schedule 1 amends the ITAA97 to deny an income tax deduction for payments where the payer has not complied with their withholding obligations

• Schedule 2 amends Schedule 1 of the TAA to introduce reporting obligations on entities that provide road freight, IT or security, investigation or surveillance services and engage other entities to perform those services on their behalf and

• Schedule 3 amends the Excise Act to establish a framework to make excise duty on tobacco due and payable at the time of manufacture.

Schedule 1 of the Tobacco Duties Bill amends the Excise Tariff Act and its Schedule to enable the calculation of excise on tobacco products manufactured in Australia.

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Background

Black Economy Taskforce The proposed measures contained in the Bills were announced by the Government in the 2018-19 Federal Budget and form part of the Government’s response to the Black Economy Taskforce’s (the Taskforce) final report: Black Economy Taskforce: final report—October 2017 (Final Report).1

The Taskforce was chaired by Michael Andrew (the current Chair of the Board of Taxation) and was established in December 2016 to develop multi-pronged policy response to combat the black economy in Australia.2

The Taskforce’s Final Report was provided to the Government in October 2017 and publicly released with the 2018-19 budget.3 The release was also accompanied by the Government’s response Tackling the Black Economy: Government Response to the Black Economy Taskforce Final Report (Government Response).4

The Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018, which passed the Parliament in September of this year, implemented some of the recommendations contained in the Taskforce’s Black Economy Taskforce: interim report-March 2017 including:

• banning the production, distribution, possession and use of electronic sales suppression tools and

• introducing reporting obligations on entities that provide courier or cleaning services and engage other entities to perform those services on their behalf.5

Size of the black economy There is no internationally agreed definition of the black economy and definitions vary within Australia. According to the Taskforce it generally covers activities which take place outside the tax and regulatory systems involving both legal and illegal activities.6

In 2012, the Australian Bureau of Statistics (ABS) estimated that ‘underground production’ or the ‘cash economy’ accounted for 1.5% of Australia’s Gross Domestic Product (GDP).7 According to the Taskforce, this amounted to approximately $25 billion.8 Earlier this year KPMG estimated the total, annual, aggregate tax gap including losses to Pay As You Go (PAYG) income tax, GST and self-assessed personal income tax to be $5.8 billion.9

1. Australian Government, Budget measures: budget paper no. 2, 2018-19, pp. 12, 22-3, 24; Black Economy Taskforce (Taskforce), Black Economy Taskforce: final report-October 2017, The Treasury, Canberra, October 2017. 2. The Treasury (Treasury), ‘Black Economy Taskforce’, Treasury website. 3. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., pp. vii-xi. 4. Australian Government, Tackling the black economy: government response to the Black Economy Taskforce final report,

Treasury, Canberra, May 2018. 5. Taskforce, Black Economy Taskforce: interim report-March 2017, Treasury, Canberra, March 2017, pp. 3-4. See for example: Taxation Administration Act 1953 (TAA), subdivision BAA of Division 2 of Part III; TAA, Schedule 1, section 396-55, items 11

and 12 of the table. For further information on the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018 see J Ayoub, Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, Bills digest, 114, 2017-18, Parliamentary Library, Canberra, 2018. 6. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., p. 12. 7. Australian Bureau of Statistics (ABS), The non-observed economy and Australia’s GDP, 2012: information paper, cat. no. 5204.0.55.008, ABS, Canberra, 12 September 2013. 8. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., p. 25. 9. KPMG, The last frontier: shining a light on the black economy, KPMG, March 2018, p. 2.

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In its Final Report the Taskforce stated that the black economy is larger than estimated by the ABS in 2012 and could be as large as 3% of GDP—in 2015-16 this equated to $50 billion.10 The Taskforce also considered that it is likely that certain elements of the black economy are continuing to grow as a result of a combination of ‘strong incentives, poor transparency and limited enforcement’.11

Further information on the black economy, including the drivers, consequences and measures announced in the 2018-19 budget aimed at addressing the black economy can be found in the Parliamentary Library’s Budget Review 2018-19 under the heading ‘Targeting the black economy’.12

Taskforce recommendations

Denying a deduction to non-compliant payers In its Final Report, the Taskforce recommended removing the tax deductibility of payments that are non-compliant with a taxpayer’s withholding obligations.13 This recommendation forms part of the Taskforce’s analysis of practices that facilitate participation in the black economy and ways in which such behaviour can be prevented both through the use of incentives and deterrents.14

The practice of denying a business a tax deduction for failing to comply with their withholding obligations may encourage compliance with the withholding regime. However, the Taskforce acknowledged that the ability to claim a deduction is essentially a ‘loophole’ which ‘should be closed’—this is because the issue is likely only to arise where the entity has been audited by the Australian Taxation Office (ATO) and the relevant deductions as well as any underreported income are reassessed.15

In the absence of effective enforcement activity, it is difficult to see how the measure will facilitate compliance where the business already operates wholly or partly outside the tax system, for example by hiring employees ‘off-the-books’ or engaging contractors at a lower rate with the understanding that no tax will be withheld and their details will not be reported to the ATO. In this respect, Deloitte, a tax advisory firm has noted:

What these provisions will fail to capture are those payments completely unreported as expenses or paid partly within the payroll system and partly out of the system. These businesses may still remain operating outside the legitimate economy until either the ATO or other regulators commence compliance activities or an organic or regulatory shift to electronic payments forces a change in behaviour (making it more difficult to hide both income and cash payments).

16 [Emphasis added].

The Taskforce was alive to this issue and considered that the proposed measures only really affect those businesses that are ‘caught doing the wrong thing’ and to this end, it recommended ‘that the measure be accompanied by appropriate detection and enforcement mechanisms’.17

10. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., p. 35. 11. Ibid. 12. Parliamentary Library, Research Branch, Budget review 2018-19, Research paper series, 2017-18, Parliamentary Library, Canberra, 2018, pp. 38-46.

13. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., p. 168. 14. Ibid., p. 145. 15. Ibid., p. 168. 16. Deloitte, ‘Tax insights: Black economy measures draw a wide net’, 10 October 2018, p. 3. 17. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., p. 169.

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Extending the taxable payment reporting regime Schedule 2 of the Black Economy Bill is consistent with the Taskforce’s Final Report which recommended that the taxable payments reporting regime be extended to ‘high-risk sectors, including security contractors, road freight transport, IT contractors, owner-builders and home improvements from 1 July 2018’.18 According to the Taskforce’s Final Report, the ATO advised the Taskforce that ‘non-lodgment and/or under-reporting of income by contractors is high’ in the security services, IT and road freight industries.19

While alternative options such as imposing withholding taxes have in the past been suggested as more effective ways of securing Commonwealth revenue,20 the Taskforce considers that a reporting regime is preferable because withholding taxes ‘introduce greater compliance burdens and substantially affect cash-flows’.21

The Taskforce also recommended that reporting obligations should be removed once compliance rates reach an ‘acceptable benchmark’.22

Domestic Manufacture of Tobacco The Taskforce recommended that imported tobacco products be taxed at the time they enter an Australian port rather than, as was the case under the previous arrangements, taxing them at the time they leave a licenced warehouse in Australia.23 The Customs Amendment (Collecting Tobacco Duties at the Border) Act 2018, which passed the Parliament in October of this year, gave effect to this measure by removing the ability of importers to defer taxation by using warehousing arrangements.24

Schedule 3 to the Black Economy Bill and Schedule 1 to the Tobacco Duties Bill ensure consistent treatment between imported and domestically manufactured tobacco products by applying excise at the time the tobacco is manufactured ‘rather than deferring liability until the time the goods are entered or delivered for home consumption’.25 Although there are cases of illegal domestic production of tobacco in Australia, there are currently no entities in Australia that are licenced to manufacture or produce tobacco.26

Committee consideration Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills had no comment on the Bills.27

18. Ibid., p. 5. 19. Ibid., p. 131. 20. The Tax Institute, Submission to Treasury, 2017-18 Budget measures, 10 November 2017, p. 2. 21. Taskforce, Black Economy Taskforce: final report-October 2017, op. cit., p. 125. 22. Ibid., p. 132. 23. Ibid., p. 311. 24. P Hawkins and C Barker, Customs Amendment (Collecting Tobacco Duties at the Border) Bill 2018, Bills digest, 35, 2018-19,

Parliamentary Library, Canberra, 18 October 2018, p. 3. 25. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, pp. 19, 22. 26. Australian Taxation Office (ATO), Illicit Tobacco Taskforce strikes again, media release, ATO website, last updated

13 August 2018; ATO, ‘Illicit tobacco’, ATO website, last updated 8 October 2018. 27. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 12, 2018, The Senate, 17 October 2018, p. 62.

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Senate Standing Committee for the Selection of Bills The Senate Standing Committee for the Selection of Bills recommended that the Bills not be referred to a committee for inquiry.28

Policy position of non-government parties/independents At the second reading stage, the Australian Labor Party supported the passage of the Bills, Andrew Leigh MP (Shadow Assistant Treasurer) stating ‘Labor will be supporting these bills which, in the main, put in place sensible, uncontroversial changes aimed at cracking down on the black economy’.29

Position of major interest groups The proposed measures contained in Schedule 1 and Schedule 2 to the Black Economy Bill were released by Treasury as Exposure Drafts in July 2018.30 At the time of writing, Treasury had not publicly released the submissions on the Exposure Drafts, however a limited number of stakeholders have made their submissions publicly available or have otherwise publicly expressed a view on different aspects of the Bill.

In its submission to Treasury, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) did not support the proposed measure now contained in Schedule 1 to the Black Economy Bill on the basis that the measure creates a further barrier for businesses to ‘catch up’ and comply with future obligations where they have fallen behind.31 Notwithstanding this, it should be noted that businesses will still receive a deduction if they voluntarily disclose their mistake to the ATO prior to them being notified by the ATO that their tax affairs are being investigated.32 In relation to the proposed expansion of the taxable payments reporting system (TPRS), the ASBFEO expressed concern more generally about the capacity of small business owners to interpret and comply with regulation.33

Self-Employed Australia, a not-for-profit association advocating for independent contractors and the self-employed, opposes Schedule 1 of the Black Economy Bill for a variety of reasons, including that it considers that the ATO already has sufficient powers to ensure compliance with the withholding provisions.34

28. Senate Standing Committee for the Selection of Bills, Report, 12, 2018, The Senate, Canberra, 18 October 2018, pp. 3-4. 29. A Leigh, ‘Second reading speech: Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018, Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018’, House of Representatives, Debates, (proof), 17 October 2018, p. 91. See also: Milton Dick, ‘Second reading speech: Treasury Laws Amendment (Black Economy Taskforce

Measures No. 2) Bill 2018, Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018’, House of Representatives, Debates, (proof), 17 October 2018, p. 94. 30. Treasury, ‘2018-19 Budget Black Economy Measure - Removing tax deductibility of certain payments’, Treasury website; Treasury, ‘2018-19 Budget Black Economy Measure - Further expansion of the taxable payment reporting system’, Treasury

website.

31. Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Submission to Treasury, 2018-19 Budget Black Economy Measure - Removing tax deductibility of certain payments, 16 August 2018. 32. Proposed subsections 26-105(7) and (8) of the ITAA97, at item 1 of Schedule 1 to the Black Economy Bill. 33. ASBFEO, Submission to Treasury, 2018-19 Budget Black Economy Measure - Further expansion of the taxable payment

reporting system, 16 August 2018. 34. Self-Employed Australia, Submission to Treasury, 2018-19 Budget Black Economy Measure - Removing tax deductibility of certain payments, 15 August 2018, pp. 4-5.

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Financial implications

Schedule 1 According to the Explanatory Memorandum, Schedule 1 to the Black Economy Bill ‘is estimated to have a small unquantifiable gain to revenue over the forward estimates period’.35

Schedule 2 Schedule 2 to the Black Economy Bill ‘is estimated to have a net gain to the budget of $545.8 million over the forward estimates period’ in underlying cash balance terms.36 Although a Regulation Impact Statement was not produced by Treasury, it estimates an average annual regulatory cost to business to be $4.2 million.37

Schedule 3 The Explanatory Memorandum states that the ‘whole package of combatting illicit tobacco reforms is estimated to result in a net gain to the budget of $3.6 billion over the forward estimates period’. However, as stated in the Explanatory Memorandum, there are currently no entities in Australia that are licenced to manufacture or produce tobacco.38 Further, and as noted by the Parliamentary Library in its Budget Review 2018-19 under the heading ‘Tobacco’, the majority of the $3.6 billion appears to be derived by bringing forward the point of taxation and applying customs duties to tobacco products already stored within warehouses.39

As a result of this measure, Treasury estimates an average annual regulatory reduction to business of $198,931.40

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bills are compatible.41

In particular the Government considers:

• Schedule 1 of the Black Economy Bill is compatible with human rights as it does not engage any applicable rights or freedoms42

• Schedule 2 of the Black Economy Bill engages the prohibition on arbitrary or unlawful interference with privacy contained in Article 17 of the International Covenant on Civil and Political Rights (ICCPR). However, the Government considers that the Black Economy Bill is

35. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 3. 36. Ibid., p. 4. 37. Treasury, Letter to Office of Best Practice Regulation, Certification of Independent Review: The Black Economy Taskforce Final

Report Equivalent to a Regulatory Impact Statement (RIS), 3 July 2018, p. 4. 38. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 20. 39. Parliamentary Library, Research Branch, Budget review 2018-19, op. cit., pp. 49-50. 40. Treasury, Letter to Office of Best Practice Regulation, op. cit., p. 4. 41. The Statement of Compatibility with Human Rights can be found at page 27 of the Explanatory Memorandum to the Bill. 42. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff

Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 27.

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consistent with Article 17 of the ICCPR on the basis that its engagement of the right to privacy will neither be unlawful nor arbitrary43

• Schedule 3 of the Black Economy Bill and Schedule 1 of the Tobacco Duties Bill engage the prohibition on arbitrary or unlawful interference with privacy contained in Article 17 of the ICCPR. However, the Government considers that the Bills are consistent with Article 17 of the ICCPR on the basis that their engagement of the right to privacy will neither be unlawful nor arbitrary.44

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights considered that the Bills did not raise any human rights concerns.45

Key issues and provisions

Schedule 1—denying a deduction to non-compliant withholders

Background

Deductions A taxpayer is generally entitled to deduct any loss or outgoing incurred in gaining or producing their assessable income or carrying on a business for the purpose of gaining or producing their assessable income—these are known as ‘general deductions’.46 The tax law also specifically lists other amounts that a taxpayer is entitled to deduct from their assessable income—these are known as ‘specific deductions’.47 Among other entitlements, businesses are generally entitled to claim a deduction for salaries and wages paid to their workers as well as for payments to contractors engaged by the business.48

Various provisions of the tax laws also prevent a taxpayer from deducting amounts, or limit the amount a taxpayer would otherwise be entitled to deduct.49 Division 26 in Part 2-5 of the ITAA97 contains some of the amounts that a taxpayer cannot deduct, or cannot deduct in full against their assessable income, for example penalties incurred under an Australian or foreign law.50 Schedule 1 to the Black Economy Bill amends Division 26 to deny an income tax deduction for certain payments where the payer has failed to comply with their withholding and reporting obligations under the tax laws.51

PAYG withholding The Pay-As-You-Go (PAYG) withholding system is contained in Part 2-5 of Chapter 2 in Schedule 1 of the TAA. Division 12 of Part 2-5 of Schedule 1 of the TAA imposes an obligation on an entity (‘a payer’) who makes particular types of payments, known as withholding payments, (for example,

43. Ibid., pp. 28-9. 44. Ibid., p. 30. 45. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 11, 2018, The Committee, 16 October 2018, p. 72.

46. ITAA97, section 8-1. 47. Ibid., section 8-5. 48. ATO, ‘Salary, wages and super’, ATO website, last modified 8 May 2018. 49. ITAA97, paragraph 8-1(2)(d) and subsection 8-5(2). 50. Ibid., section 26-5. 51. ITAA97, proposed section 26-105.

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the payment of salary or wages to an employee) to withhold an amount from the payment and remit it to the ATO.52

A taxpayer is entitled to a credit for the amount that is withheld and remitted to the ATO and it is applied against their tax liability once their tax return is submitted—any excess credit is refunded.53 This system ensures the efficient and timely recovery of Commonwealth revenue over the course of a financial year and facilities taxpayer engagement and compliance.

It is an offence to fail to withhold where required to so under Division 12 of Part 2-5 of Schedule 1 to the TAA and administrative penalties equal to the amount required to be withheld may also be imposed.54

An entity that is required to withhold an amount is also required under section 16-150 of Schedule 1 to the TAA to notify the ATO of the amount on or before the day on which the amount is due to be paid, even if the amount is a ‘nil amount’.55 Section 389-5 contains the corresponding reporting obligations that must be complied with as a result of the introduction of Single Touch Payroll (STP). Broadly, STP enables a business to report and comply with their taxation reporting obligations at the same time that their payroll is being processed.56

Proposed changes Proposed subsection 26-105(1) of the ITAA97 prevents a taxpayer from claiming a deduction in relation to certain withholding payments if the payer was required to withhold an amount and failed to do so, or the payer was required to notify the ATO of the amount under section 16-150 or section 389-5 of Schedule 1 to the TAA, but failed to do so.57

The withholding payments that proposed subsection 26-105(1) of the ITAA97 apply to are:

• a payment of salary, wages, commission, bonuses or allowances to an employee

• a payment for remuneration of company directors (directors’ fees)

• a payment made to a religious practitioner58

• a payment made to an individual under a labour hire arrangement and

• a payment made for a supply to another entity carrying on an enterprise in Australia where that entity does not quote or misquotes their ABN.59 While section 12-190 of Schedule 1 to the TAA also applies to require payers to withhold where a supply of goods is made, proposed subsection 26-105(3) excludes both a supply of goods and a supply of real property from the scope of the proposed measure.

The taxpayer will only be denied a deduction if they fail to withhold an amount at all, rather than failing to withhold the correct amount.60

52. TAA, Schedule 1, section 6-5 and section 12-35. The payments and other transactions subject to PAYG withholding are called withholding payments and are summarised in the table contained under subsection 10-5(1) of Schedule 1 to the TAA. 53. Ibid., Schedule 1, section 6-10. 54. Ibid., Schedule 1, subsection 16-25(1) and subsection 16-30(1). 55. Ibid., Schedule 1, subsection 16-150(1). 56. ATO, ‘About Single Touch Payroll’, ATO website, last modified 24 May 2018. 57. ITAA97, proposed paragraph 26-105(1)(b). 58. Religious practitioner is defined in subsection 995-1(1) of the ITAA97 and means: a minister of religion; a student at an

institution who is undertaking a course of instruction in the duties of a minister of religion; a full-time member of a religious order; or a student at a college conducted solely for training persons to become members of religious orders. Under subsection 3AA(2) of the TAA, an expression in Schedule 1 to the TAA has the same meaning as in the ITAA97. 59. ITAA97, proposed subparagraphs 26-105(1)(a)(i)-(v). 60. ITAA97, proposed subparagraph 26-105(1)(b)(i).

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A taxpayer will also be denied a deduction if they fail to comply or fail to purportedly comply with their reporting obligation. The Explanatory Memorandum provides the following example of where a taxpayer ‘purports to comply’:

Similarly, purporting to comply with the reporting obligations by notifying an incorrect amount will not affect the entitlement to a deduction. If, because of an error, the amount reported does not reflect the amount required to be withheld or the amount actually withheld (if those amounts are different), the deduction is maintained. Provided an amount is withheld and a notification is made, there is an opportunity to correct any remaining contraventions in respect of the amount or the payment of the amount.

61 (Citations omitted and emphasis added)

This approach is justified by the Explanatory Memorandum on the basis that it is the ‘total failures to withhold’ that ‘represent the most significant risk to government revenue’.62 The Tax Technical website noted that Schedule 1 could operate ‘harshly’ where a payroll agent (widely used by business) fails to withhold and does not notify the ATO.63 The taxpayer does have the opportunity to remedy this by voluntarily disclosing the error (if it is known to them) before the ATO notifies them that their tax affairs are being investigated.64

The reporting obligations that proposed subparagraph 26-105(1)(b)(ii) of the ITAA97 refers to are those contained in section 16-150 and section 389-5 of Schedule 1 to the TAA. As noted in the background above, section 16-150 of Schedule 1 to the TAA imposes an obligation on an entity that is required to withhold an amount to notify the ATO of the amount on or before the day on which the amount is due to be paid, even if the amount is a ‘nil amount’.65 Subsection 389-5(1) of Schedule 1 to the TAA requires same-day reporting for those withholding payments listed above except for payments made under labour hire arrangements, however such payments can be reported voluntarily using STP.66 A taxpayer is not required to report under section 16-150 if they report under section 389-5.67

Non-cash benefits

Under subsection 14-5(1) of Schedule 1 to the TAA an entity must pay an amount to the ATO before providing a non-cash benefit68 to an entity where the payer would have otherwise been required to withhold under the PAYG withholding provisions if the benefit was instead paid as money.69 The object of the provisions is to ensure consistent withholding treatment between the payment of non-cash benefits and the payment of cash benefits.70 This ensures that entities cannot avoid withholding obligations by providing non-cash benefits instead of money.71

61. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 8. 62. Ibid. 63. J Morgan, ‘Treasury Laws Amendment (Black Economy Taskforce Measures No 2) Bill 2018 - new s26-105 to deny deductions

for wages etc if PAYG amounts not withheld; amendments to s396-55 extend reporting obligations to contractor payments in the road freight, IT, security & investigation or surveillance industries’, Tax Technical website, 22 September 2018. 64. ITAA97, proposed subsections 26-105(7) and (8). 65. TAA, Schedule 1, subsection 16-150(1). 66. Ibid., Schedule 1, table item 1 in subsection 389-5(1). 67. Ibid., Schedule 1, section 389-20. 68. Under subsection 995-1(1) of the ITAA97 a non-cash benefit is property or services in any form except money. If a non-cash benefit is dealt with on behalf of an entity, or is provided or dealt with as an entity directs, the benefit is taken to be provided to the entity. 69. TAA, Schedule 1, subsection 14-5(2). 70. Ibid., Schedule 1, paragraph 14-1(a). 71. Ibid., Schedule 1, paragraph 14-1(b).

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Where an entity is required to pay an amount to the ATO for a non-cash benefit under Subdivision 14-A of Schedule 1 to the TAA, the entity must notify the ATO of the amount on or before the day on which the amount is due to be paid.72

Proposed subsection 26-105(2) of the ITAA97 prevents a taxpayer from deducting a non-cash benefit in relation to the withholding payments discussed above if, before providing the benefit, the taxpayer fails to comply or fails to purportedly comply with the notification requirements under section 16-150 of Schedule 1 to the TAA—that is, a deduction will be denied if the taxpayer is obliged to notify the ATO of the amount withheld in relation to the non-cash benefit provided but fails to do so, or fails to purportedly do so.73

The withholding provisions that proposed subsection 26-105(2) of the ITAA97 apply in relation to are the same as those in proposed subsection 26-105(1) (stated above).74

Exceptions

Nil-amounts Both proposed subsections 26-105(1) and (2) of the ITAA97 do not apply if the amount required to be withheld or paid to the ATO (as the case may be), is a nil amount.75 Accordingly, while an entity still has an obligation to report such amounts to the ATO, they will not be denied a deduction under the proposed amendments for failing to do so.

Incorrectly characterising an employee as a contractor Section 12-35 of Schedule 1 to the TAA requires an entity to withhold an amount from salary, wages, commission, bonuses or allowances paid to an individual as an employee.

Under section 12-190 of Schedule 1 to the TAA a payer must withhold an amount from a payment it makes to another entity for a supply that the other entity has made, or proposes to make, to the payer in the course or furtherance of an enterprise carried on in Australia by the other entity where no exception applies.76 Two of the ‘exceptions’ that apply so that withholding is not required include:

• where a supplier’s ABN is quoted—when the payment is made the other entity has quoted its ABN on an invoice or some other document relating to the supply77

• where a supplier’s ABN is purportedly quoted—when the payment is made, the other entity has provided the payer with an invoice or other document purporting to quote the other entity’s ABN and

- the other entity does not have an ABN or the invoice or other document does not in fact quote the other entity’s ABN and - the payer has no reasonable grounds to believe that the other entity does not have an ABN, or that the invoice or other document does not quote the other entity's ABN.78 Similar exceptions also exist where the supply is made through an agent where the agent correctly quotes their ABN or the agent purports to quote their ABN and the payer has no reasonable grounds to believe that the agent does not have an ABN.79

72. Ibid., Schedule 1, paragraph 16-150(1)(b). 73. ITAA97, proposed paragraph 26-105(2)(b). 74. ITAA97, proposed subparagraphs 26-105(2)(a)(i)-(v). 75. ITAA97, proposed subsection 26-105(4). 76. TAA, Schedule 1, paragraphs 12-190(1)(a) and (b). 77. Ibid., Schedule 1, paragraphs 12-190(2)(a) and (b). 78. Ibid., Schedule 1, paragraphs 12-190(3)(a)-(c).

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Proposed subsections 26-105(1) and (2) of the ITAA97 deny a deduction where the payer fails to comply with their obligations under either section 12-35 or section 12-190 of Schedule 1 to the TAA.80 This could result in a situation where an employee is incorrectly characterised by the payer as a contractor and accordingly, the payer complies or purports to comply with their obligations under section 12-190 of Schedule 1 to the TAA (about contractors) when they should have complied with section 12-35 (about employees) instead.

Without an exception, the employer would breach proposed subsections 26-105(1) and (2) and would be denied a deduction. To remedy this, proposed subsections 26-105(5) and (6) mirror the ‘exceptions’ which are used in section 12-190 of Schedule 1 to the TAA (where no ABN quoted) and apply them to proposed subparagraphs 26-105(1)(a)(i) regarding payments to employees and 26-105(2). The exception is justified in the Explanatory Memorandum as follows:

The Government recognises there are situations where an employer honestly believes their employees are acting as contractors — and has complied with the no ABN withholding rule that would apply in that scenario — but this position is not upheld by the Commissioner. The amendments do not deny a deduction in such situations.

81

While the deduction will still be available to the employer, they could still be subject to penalties for failing to comply with their obligations to withhold under section 12-35 of Schedule 1 to the TAA.82

Notwithstanding this exception for the incorrect classification of employees and contractors, Deloitte considers that ‘the impact of these proposed changes on mainly compliant businesses should not be underestimated’. In this respect Deloitte notes that businesses may unwittingly fall foul of the proposed measures where, for example, the business processes an unusual payment such as a bonus or commission.83

Voluntary Notification Proposed subsection 26-105(1) of the ITAA97 does not apply to deny a taxpayer a deduction if the taxpayer fails to comply with their withholding or notification requirements but nevertheless discloses the mistake to the ATO before the taxpayer is informed that their tax affairs are being examined.84 A similar exception is provided for taxpayers who would be denied a deduction under proposed subsection 26-105(2) of the ITAA97 because of their failure to comply with section 16-150 of Schedule 1 to the TAA but nevertheless voluntarily disclose this.85 According to the Explanatory Memorandum the exception ‘encourages taxpayers to come forward and comply with their withholding obligations’.86

79. Ibid., Schedule 1, subsections 12-190(2A) and (3A). 80. ITAA97, proposed subparagraphs 26-105(1)(a)(i) and (v) and proposed subparagraphs 26-105(2)(a)(i) and (v). 81. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 8.

82. Ibid., see Example 1.1 on pages 8-9; TAA, Schedule 1, subsection 16-25(1) and subsection 16-30(1). 83. Deloitte, ‘Tax insights: Black economy measures draw a wide net’, op. cit., p. 3. 84. ITAA97, proposed subsection 26-105(7). 85. ITAA97, proposed subsection 26-105(8). 86. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff

Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 9.

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Application The amendments made by Schedule 1 to the Black Economy Bill apply in relation to a payment made or a non-cash benefit provided on or after 1 July 2019.87

Schedule 2—extending third party reporting As noted in the background above, Schedule 2 to the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018 extends the TPRS to businesses with ABNs that provide courier or cleaning services and engage other entities to perform those services.

The proposed measures in Schedule 2 to the Black Economy Bill extend the TPRS to entities that have an ABN and supply a ‘road freight service’, ‘security, investigation or surveillance service’ or an ‘information technology service’ and engage other entities to perform those services on their behalf.

Who does it apply to? Item 1 of Schedule 2 to the Black Economy Bill repeals item 12 of the table in section 396-55 of Schedule 1 to the TAA, and inserts proposed table items 12, 13 and 14 into that table.

Under proposed table items 12, 13 and 14 in section 396-55 in Schedule 1 of the TAA, an entity that:

• has an Australian Business Number and

• makes a supply of a:

- courier or road freight service - security, investigation or surveillance service or - information technology (IT) service must report certain information to the Commissioner where the entity has provided consideration to another entity wholly or partly for the supply of those mentioned services. However, the relevant entity does not need to report this information if:

• the entities are members of the same consolidated group (consolidation allows wholly-owned corporate groups to be treated as a single entity for tax purposes) or Multiple entry consolidated (MEC) group88 or

• the PAYG withholding obligations under Division 12 of Schedule 1 to the TAA apply, for example, payment to employees for which an amount is already required to be withheld.89

As noted above, item 1 of Schedule 2 to the Black Economy Bill repeals item 12 of the table in section 396-55 of Schedule 1 to the TAA— item 12 of the table was inserted by the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018 and it is the current item imposing reporting obligations on businesses that provide courier services. This approach appears to have been taken by the Government because businesses that provide ‘road freight’ services are also likely to provide ‘courier’ services. This means that an entity that makes either ‘a supply of a courier service or a road freight service … are required to report to the Commissioner’.90

The terms ‘road freight’, ‘IT’ and ‘security, investigation or surveillance service’ are not defined in the Black Economy Bill or the tax law and according to the Explanatory Memorandum the terms

87. Item 2 of Schedule 1 to the Black Economy Bill. 88. While the consolidation regime requires an Australian resident head company (item 1 of the table in section 703-15 of the ITAA97), under Division 701 of the ITAA97 Australian-resident entities that are wholly-owned subsidiaries of a foreign head company can form a MEC Group.

89. TAA, Schedule 1, proposed items 12, 13 and 14 of the table in section 396-55. 90. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 14.

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are intended to take their ordinary meaning.91 The Explanatory Memorandum explains the types of activities that are both likely and unlikely to fall within the ordinary meaning of the terms.92 Similarly, the ATO has also issued draft guidance on the terms and provides relevant examples for consultation.93

Exemptions Under the existing law, the Commissioner may by notice, or legislative determination, exempt a particular entity or a class of entities from the reporting requirements imposed under section 396-55 of Schedule 1 to the TAA.94 Such a determination was made under subclauses 3(2) and (3) of Schedule 2 to the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018.95 That determination exempts an entity from the proposed reporting requirements where less than 10 per cent of the entity’s GST turnover for the reporting period relates to a supply of a cleaning or courier service.96

Proposed exemption—courier and road freight services Subitem 3(1) of Schedule 2 to the Black Economy Bill revokes the existing exemption in relation to ‘courier services’ and proposes to replace it with a new exemption. The current reporting exemption applies where the total payments a reporting entity receives for courier services is less than 10 per cent of the entity’s relevant GST turnover.97 The proposed exemption in subitems 3(1) and (2) of Schedule 2 will take into consideration both the payments a reporting entity receives for courier services and road freight services.98 As stated in the Explanatory Memorandum, this:

… reflects that there is a single reporting obligation for courier and road freight services, and that supplies of both those services should be combined to determine whether an entity exceeds the turnover-threshold test. 99

The proposed change will apply from the later of 1 July 2019 or the commencement of Schedule 2 to the Black Economy Bill.100 As stated in the Explanatory Memorandum, the proposed exemption applies if:

• the total payments a reporting entity receives for both courier services and road freight services are less than 10 per cent of the entity’s relevant GST turnover

• the reporting entity is not required to report details of the transaction under a separate reporting obligation in section 396-55 of Schedule 1 to the TAA and

• the entity has not voluntarily chosen to give a report.101

The justification for the exemptions was briefly provided in the Revised Explanatory Memorandum to the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018 which

91. Ibid., p. 14. 92. Ibid., pp. 14-17. 93. ATO, ‘Draft TPRS Guidance’, ATO Let’s Talk website. 94. TAA, Schedule 1, subsections 396-70(1) and (4). 95. Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018, Schedule 2, subclause 3(1). 96. Ibid., Schedule 2, subclauses 3(2) and (3). 97. Ibid., Schedule 2, subclause 3(3). 98. Subitem 3(2) of Schedule 2 to the Black Economy Bill. 99. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff

Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 17. 100. Subitem 3(1) of Schedule 2 to the Black Economy Bill. 101. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff

Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 17; paragraphs (a) - (c) of subitem 3(2) in Schedule 2 to the Black Economy Bill.

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stated that the exemption ‘ensures that entities that only make a minimal number of supplies of cleaning or courier services as a proportion of their overall GST turnover are not required to prepare and give reports’.102 The ASBFEO recommended that the threshold should be 50 per cent and considered that the threshold of 10 per cent ‘would itself require an additional compliance burden’.103

Both the proposed exemption and the proposed revocation of the existing exemption will be subject to Parliamentary scrutiny by being included in the Black Economy Bill. Therefore subitem 3(4) of Schedule 2 to the Black Economy Bill provides that neither the proposed determination nor the revocation of the existing determination is a legislative instrument—this means that the exemption on this one occasion is not subject to the Legislation Act 2003 which broadly governs the making, regulating and repeal of legislative instruments.104 However, any future determination made by the Commissioner under subsection 396-70(4) of Schedule 1 to the TAA will be a legislative instrument and subject to the Legislation Act.105

Proposed exemption—Security, investigation or surveillance and IT services There is no similar exemption contained within the Black Economy Bill for businesses that provide ‘security, investigation or surveillance’ or ‘IT’ services. However, the ATO has consulted on a proposed determination that it appears will be issued separately for both proposed table items 13 and 14 in section 396-55 in Schedule 1 of the TAA (‘security, investigation or surveillance’ and ‘IT’ services). The proposed determination broadly provides that an entity is not required to report where the total value of the consideration it receives for providing the relevant services is less than 10% of its relevant GST turnover.106

What is required to be reported? The relevant entity must provide the ATO with a report that sets out specified information for the financial year.107 Under section 396-60 of Schedule 1 to the TAA, the information must relate to:

• the identification, collection, recovery or reduction of a possible tax-related liability of a party to the transaction and

• may relate to identifying the parties to the transaction.108

Generally the information that will need to be provided by the entity which makes the supply includes the name, address and ABN of the other entity and the gross amount paid for the financial year.109

Failing to provide the ATO with the relevant information may result in an administrative penalty for failing to lodge a document on time.110 A penalty could also be imposed for making a false or

102. Revised Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, p. 29. 103. ASBFEO, Submission to Treasury, 2018-19 Budget Black Economy Measure - Further expansion of the taxable payment reporting system, op. cit. 104. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff

Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 18. 105. Under proposed subitem 3(5) of Schedule 2 to the Black economy Bill the Commissioner may by legislative instrument amend or repeal the proposed determination. 106. ATO, ‘Draft LI TPRS Exemption’, ATO Let’s Talk website. 107. TAA, Schedule 1, section 396-55. 108. ITAA97, section 995-1; TAA, Schedule 1, subsection 255-1(1) a tax-related liability is a pecuniary liability to the

Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable). 109. ATO, ‘Taxable payments annual report (TPAR)’, ATO website, last modified 4 October 2018. 110. TAA, Schedule 1, section 286-75.

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misleading statement where the required form is submitted to the ATO but it is misleading, whether because of information included in it or omitted from it.111

Application Schedule 2 of the Black Economy Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day of Royal Assent.112 Generally, the proposed amendments apply in relation to transactions that occur on or after 1 July 2019.113 However, as noted above, those entities providing ‘courier’ services will continue to report transactions occurring on or after 1 July 2018 rather than 1 July 2019.114

Schedule 3—imposing excise on tobacco goods when manufactured

Background and summary Schedule 3 to the Black Economy Bill amends the Excise Act and Schedule 1 to the Tobacco Duties Bill amends the Excise Tariff Act and its Schedule to make excise on domestically manufactured tobacco due and payable at the time of manufacture rather than being subject to existing deferral arrangements. As noted in the Assistant Treasurer’s second reading speech to the Black Economy Bill:

Schedule 3 is part of a suite of measures the government announced in the 2018-19 budget to combat illicit tobacco. It moves the taxing point of domestically manufactured tobacco to the point of manufacture rather than when the tobacco enters home consumption. 115

(Emphasis added).

The Customs Amendment (Collecting Tobacco Duties at the Border) Act 2018 (CAA) was passed by the Parliament in October 2018 and also forms part of the ‘suite of measures’ announced by the Government in the 2018-19 budget to ‘combat illicit tobacco’.116 The Act requires tobacco importers to pay all duty and tax liabilities upon importation rather than allowing such liabilities to be deferred until the imports leave licenced warehouses in Australia.117 Additionally, it also requires the duty on any warehoused tobacco to be paid within 12 months of the commencement of Schedule 2 to the CAA, being 1 July 2019.118

Excise is imposed on domestically produced products and customs duty is imposed on imports—as stated in the Explanatory Memorandum:

Excise is a tax on certain goods produced in Australia. Imported goods comparable to those subject to excise, known as excise-equivalent goods, attract customs duty that includes a component imposed at the same rate as the excise applied to locally produced goods. This component is commonly referred to as excise-equivalent customs duty.

119

111. Ibid., Schedule 1, subsection 284-75(1). 112. Proposed table item 2 in subclause 2(1) of the Black Economy Bill. As Schedule 2 to the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018 commenced on 4 October 2018, the ‘later date’ as contemplated by the commencement clause in the Black Economy Bill will be the first 1 January, 1 April, 1 July or 1 October to occur after the day

of Royal Assent. 113. Subitems 2(1) and (2) of Schedule 2 to the Black Economy Bill. 114. Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Act 2018, Schedule 2, subclause 2(1); subitem 2(1) of

Schedule 2 to the Black Economy Bill. 115. S Robert, ‘Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018’, House of Representatives, Debates, (proof), 20 September 2018, p. 36. 116. Budget measures: budget paper no. 2: 2018-19, op. cit., p. 12. 117. Customs Amendment (Collecting Tobacco Duties at the Border) Act 2018, Schedule 1, clause 7. 118. Ibid., table item 2 in subsection 2(1); Schedule 1, clause 13. 119. Explanatory Memorandum, Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 [and] Excise Tariff

Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, p. 19.

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Schedule 3 to the Black Economy Bill and Schedule 1 to the Tobacco Duties Bill implements comparable excise timing arrangements for the domestic manufacture of tobacco as implemented for tobacco imports under the CAA.120

A licence must be obtained in order to manufacture tobacco whether for domestic or commercial sale.121 However, as stated in the Explanatory Memorandum ‘no entities in Australia are licenced to manufacture or produce tobacco’—that is, Australia does not currently manufacture or produce domestic tobacco but the proposed measures ensure that the taxing point for any future domestic manufacture of tobacco is consistent with the treatment of tobacco imports.122

Application Consistent with the amendments made by the CAA, the amendments made by Schedule 3 to the Black Economy Bill and Schedule 1 to the Tobacco Duties Bill apply in relation to tobacco goods manufactured on or after 1 July 2019.123

120. Item 7 of Schedule 3 to the Black Economy Bill. 121. Excise Act 1901, section 25. 122. Ibid., p. 20; S Robert, ‘Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018’, op. cit., p. 36; Budget measures: budget paper no. 2: 2018-19, op. cit., p. 12; ATO, ‘Tobacco excise’, ATO website, last updated 4 January 2016.

123. Item 10 of Schedule 3 to the Black Economy Bill; item 6 of Schedule 1 to the Tobacco Duties Bill 2018.

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