Australian Commission Oversees New Tax System Changes

by Mary Swire, Tax-News.com, Hong Kong

26 June 2001

The Australian Competition and Consumer Commission (ACCA) has announced that it will ensure that consumers and businesses in Australia will receive benefits of around AU$2 billion each year as promised from the new tax system changes due to be implemented on 1 July, 2001. From this date, the current Financial Institutions Duty (FID) and Stamp Duty on Quoted Marketable Securities (SDQMS) will be abolished under the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Arrangements.

In a statement released by ACCC, the commissioner responsible for the Goods and Services Tax, Dr David Cousins, said: 'The ACCC is monitoring the upcoming abolition of FID and SDQMS as part of its ongoing price exploitation role in the transition to the New Tax System.'

He added: 'Consumers should be aware that in some instances they may be charged FID or SDQMS after 30 June 2001, but this should only occur on the first statement relating to deposits or security transactions which were actually made prior to the abolition date. Under current FID reporting arrangements for most financial institutions, FID is deducted from account balances and reported to account holders at the end of each interest payment cycle.'

The ACCC has liaised with major industry bodies to make sure that they are fully aware of the implications arising from the tax system changes.

Dr Cousins noted: 'The direct benefit for consumers and businesses is they will no longer pay FID on deposits to their financial institutions, nor stamp duty on quoted marketable security transactions. Around $1.2 billion was collected in FID and around $800 million in SDQMS in the 1999/2000 financial year.'

Formed in 1995, the ACCC is an independent statutory authority and is Australia's only national agency dealing generally with competition matters and the only agency with responsibility for enforcement of the Trade Practices Act and the associated State/Territory application legislation.

Recommended