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2000-2001 Northern Territory Budget

Key Revenue Measures

Relevant Legislative Amendments
2000-01 Revenue Circulars

Changes to:

A number of key tax measures have been announced within this Budget. The net effect of these measures is estimated to increase revenue collections by $2.2M. The measures comprise three broad groups being:

	-	revenue related measures. The Territory’s tax mix has been revised in line with similar taxes raised in other jurisdictions. This is to reduce differences across the States and the Australian Capital Territory, and to more equitably spread the tax load across the Territory’s taxes.
	-	integrity and anti-avoidance measures. These Budget measures bolster the integrity of the Territory’s stamp duty regime and counter a range of stamp duty avoidance schemes.
	-	measures that enhance equity and efficiency of certain Territory taxes. These measures will reduce compliance and administration costs for taxpayers.

All the measures take effect from 1 July 2000 with the exception of the integrity and anti-avoidance measures that take effect from Budget Day (16 May 2000).

Payroll Tax

	-	the payroll tax rate reduces from 6.75% to 6.6%.
	-	clarifies payments to workers engaged under labour hire arrangements are subject to payroll tax.
	-	the lodgement and payment date for payroll tax is extended from the 7th to the 21st of each month. For most employers, this will align with the due date for their Commonwealth Pay As You Go withholding liabilities. This will provide cash flow benefits as well as enhanced administration for employers.
	-	ensures payroll tax does not apply where a person performs services in another country for a period of greater than six months. The exemption applies for the service period beyond 6 months.

Insurance Duty

clarifies payments to workers engaged under labour hire arrangements are subject to payroll tax.

	-	increase in the stamp duty rates on general insurance premiums from 8% to 10%.
	-	There is no change to the stamp duty rate for life insurance.
	-	include indemnity insurance premiums in the general insurance stamp duty base.
	-	adopts a 'location of risk' basis for determining whether stamp duty on an insurance policy is payable in the Territory, as is the case in the other States and the Australian Capital Territory.
	-	allows the apportionment of stamp duty payable on a insurance policy (general or life), where the policy cover risks which are transportable between States and the Australian Capital Territory. The apportionment is to be set out in a schedule of apportionment, as agreed between the States and the Australian Capital Territory.

Hiring Duty

	-	includes hire purchase agreements in the hiring arrangements stamp duty base.
	-	ensures stamp duty is returned to the Territory where goods are hired solely or predominantly for use in the Territory, or in the case of motor vehicles, where the vehicle is hired from a place in the Territory.

Conveyance Duty

	-	ensures stamp duty 'land rich company' provisions apply to mining tenements and mining information attaching to such tenements.
	-	ensures stamp duty applies to certain trust related transfers (such as verbal declarations of trust).
	-	counters the use of put and call option schemes for avoiding or delaying payment of stamp duty.
	-	includes leases as encumbrances for the purposes of determining the unencumbered value of property transferred (addresses the Bradney case).
	-	ensures the buy-back of marketable securities remains subject to stamp duty (addresses the Coles-Myer case).
	-	provides that the stamp duty exemption applicable to public benevolent institutions, hospitals, religious institutions and educational institutions only applies where the property is used for purposes directly related to the objects for which the institution is established. This will mean a lease or an acquisition of property used for commercial purposes will not be exempt from stamp duty.

With the exception of the last measure (regarding the exemption for PBIs etc), the conveyance duty measures take effect from Budget Day (16 May 2000).

Marketable Securities Duty

ensures shares traded through a broker’s representative operating in the Territory will be dutiable in the Territory.

Lease Duty

	-	enables for the 'up-front' estimate of unascertainable rents (for example, turnover based rents and rents expressed as market rent) to be used for assessing the stamp duty payable on a lease. In most cases, re-lodgement will only be required if the estimated rent is greater than the actual rent paid.
	-	for a lease that includes rent review clauses, amendments will allow stamp duty to be assessed 'up-front' on the estimated rent increase by applying a Consumer Price Index (CPI) based factor.

Currently such rents are assessed in arrears after the rent is ascertainable or rent increase has crystallised. This process requires leases to be resubmitted and reassessed.

Stamp Duty on Motor Vehicle Certificates Registration

	-	additional administrative powers have been provided to enhance the collection of stamp duty raised on the transfer of a motor vehicle certificate of registration.
	-	These measures include enabling the default assessment of duty and penalties where a person has not registered a vehicle within fourteen days of acquiring the vehicle.
	-	clarifying the application of certain exemptions as they relate to transfers of motor vehicle certificates of registration.
	-	the reorganisation of the legislation that relates to motor vehicle certificates of transfer.

Rationalising a number of Nominal Stamp Duties

	-	duty on mining agreements, guarantees, letters or powers of attorney has been removed, and the setting of a single amount of $20 to apply to all other nominal duty heads.
	-	currently, a number of documents are stamped with nominal duty varying from $3 to $50. These duty categories have been rationalised, such that nominal

Other Administrative measures

	-	allowing electronic documents to be admitted as evidence.
	-	providing legislative support for certain aspects of the Conveyance By Return scheme.
	-	clarifying the administrative treatment of the first home owner stamp duty exemption for recipients under the Homestart or Homeshare shared equity housing assistance scheme.
	-	allowing extensions of time that a person is able to lodge objections and refunds.
	-	paying interest where a refund of tax arises by way of a successful objection or appeal.

Footnote: Interaction of GST with Territory taxes and royalties

Legislative amendments will clarify that the dutiable value for most stamp duties is to be determined on a GST-inclusive basis. This position is being adopted by all States and Territories and is consistent with the current practice of determining stamp duties on a sales tax inclusive basis.

The exception relates to hiring duty which is to be determined by the Northern Territory, and most States, on a GST-exclusive basis to counter a "tax cascade" problem that would otherwise arise.

Mineral royalties and petroleum royalties will also to be determined on a GST-exclusive basis. This ensures the royalty impact does not adversely disadvantage domestic sales over export sales.

Pursuant to the national tax reform agreement with the Commonwealth Government, gambling tax rates are being adjusted to take account of the impact of the GST on gambling operators. In general, this is achieved by reducing existing Territory tax rates by an amount equivalent to the GST. Where the existing tax is less than the GST, the Territory will reduce its tax rate to zero.

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