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Commodity and other indirect taxes

Date

2.2 Tax expenditures (continued)

F. Commodity and other indirect taxes

Commodity taxes include volumetric taxes on the consumption of tobacco, fuel, beer, spirits (and equivalent imports), and ad valorem taxes on the consumption of wine and luxury cars. These taxes are imposed at either the retail, manufacture or importation stage. Other indirect taxes covered by this benchmark include the Passenger Movement Charge and agricultural levies.

For these taxes, the benchmark comprises:

  • either the value or quantity of the commodity sold as the tax base;
  • the rate of tax that applies to the price or quantity of the commodity sold as the tax rate; and
  • the entity that has the legal obligation to pay the tax as the tax unit.

Commodity taxes also include customs duties on goods imported into Australia. The benchmark for customs duties comprises duty-free imports of goods into Australia, except to the extent that the customs duty imposed is equivalent to taxes imposed on domestically produced goods, such as excise equivalent customs duties.

F1 Primary industry levies — exemptions for small and large producers
Agriculture, forestry and fishing ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: F1
Estimate Reliability: Not Applicable * Category 1+
Commencement date: Introduced before 1985 Expiry date:  
Legislative reference: Primary Industries (Customs) Charges Act 1999 Primary Industries (Excise) Levies Act 1999

Certain producers are exempt from primary industry levies. While the specific exemptions differ on a commodity by commodity basis, they are all in some way related to the quantity or value of the particular commodity produced in a given year.

F2 Exemptions from radiocommunications taxes for not-for-profit community or government entities
General public services — General services ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
5 5 6 8 8 8 8 8
Tax expenditure type: Exemption 2012 TES code: F2
Estimate Reliability: Medium    
Commencement date: 1992 Expiry date:  
Legislative reference: Section 294, Part 5.7 of the Radiocommunications Act 1992

The apparatus licence fee is an annual tax applicable to broadcasting licence holders to recover the indirect costs of spectrum management and provide incentives for efficient spectrum use.

Exemption from the apparatus licence fee is available to organisations or individuals who are: diplomatic and consular missions; surf life saving and remote area ambulance services; emergency services or services for the safe-guarding of human life — including rural fire fighting; search and rescue and coast guard services. These must be staffed principally by volunteers and be exempt from paying income tax.

Recreation and culture ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
- - .. .. .. .. .. -
Tax expenditure type: Exemption, Concessional rate 2012 TES code: F3
Estimate Reliability: Medium    
Commencement date: 2010 Expiry date: 31 December 2015
Legislative reference: Radiocommunications (Transmitter Licence Tax) Determination 2003 (No.2) Radiocommunications (Receiver Licence Tax) Determination 2003 (No.2)

The apparatus licence fee is an annual tax applicable to broadcasting licence holders to recover the indirect costs of spectrum management and provide incentives for efficient spectrum use.

A 50 per cent reduction in the apparatus licence tax component of the apparatus licence fee is available for certain licensees who relocate in the radio spectrum. To be eligible for the reduction, relocation must occur before certain dates, depending on the band from which they are relocating, and the reduction in tax continues until the licence expires or 31 December 2015, whichever comes first.

F4 Rebate for broadcasting licence fees
Recreation and culture ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
- 45 130 155 - - - -
Tax expenditure type: Rebate 2012 TES code: F4
Estimate Reliability: Medium    
Commencement date: 2010 Expiry date: 30 June 2012
Legislative reference: Television License Fees Regulations 1990

Free-to-air television broadcasters received licence fee rebates of 33 per cent in 2010 and 50 per cent from 1 January 2011 to 30 June 2012.

F5 Exemptions under the Pa
ssenger Movement Charge
Transport and communication ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
40 50 50 60 60 60 70 70
Tax expenditure type: Exemption 2012 TES code: F5
Estimate Reliability: Medium — High    
Commencement date: 1978 Expiry date:  
Legislative reference: Passenger Movement Charge Act 1978

Certain passengers are exempt from the Passenger Movement Charge.

F6 Regional Equalisation Plan rebates
Transport and communication ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
4 4 4 4 1 1 1 1
Tax expenditure type: Rebate 2012 TES code: F6
Estimate Reliability: Medium    
Commencement date: 1 July 2000 Expiry date:  
Legislative reference: Television Licence Fees Act 1964

Regional and remote commercial television broadcasters receive a licence fee rebate to assist with the costs associated with the switchover to digital television.

F7 Indirect tax — tourism; inwards duty free
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: F7
Estimate Reliability: Not Applicable * Category 3+
Commencement date: Introduced before 1985 1 July 2000 (WET) Expiry date:  
Legislative reference: Customs Act 1901 Item 15 in Part 1 of Schedule 4 to the Customs Tariff Act 1995 Section 7-15 of a A New Tax System (Wine Equalisation Tax) Act 1999

Tobacco and alcohol products brought into Australia by inbound international travellers 18 years and over, within an allowance, are not subject to wine equalisation tax and excise-equivalent customs duty.

F8 Concessional rate of excise levied on aviation gasoline and aviation turbine fuel
Fuel and energy ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
980 1,020 1,070 970 1,010 1,280 1,340 1,400
Tax expenditure type: Concessional rate 2012 TES code: F8
Estimate Reliability: Medium    
Commencement date: 15 March 1956 Expiry date:  
Legislative reference: Item 10 of the Schedule to the Excise Tariff Act 1921

Aviation gasoline and aviation turbine fuel are subject to a lower rate of excise than the benchmark rate. From 1 July 2012 to 30 June 2014, the excise rate includes a ‘carbon component rate’, which is determined by the emission factor of each fuel and the carbon price. The inclusion of a carbon component of excise reduces the value of the concessional rate of excise. From 1 July 2014, the value of the concession will increase due to the revised carbon tax benchmark.

Excise on aviation fuel has been used to fund the provision of air services by the Australian Government. Excise on aviation fuel is currently directed to the funding of the Civil Aviation Safety Authority (CASA). The carbon component of the tax is not directed to CASA.

F9 Excise concessions for ‘alternative fuels’
Fuel and energy ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
750 730 690 570 460 380 300 290
Tax expenditure type: Concessional rate, Increased rate 2012 TES code: F9
Estimate Reliability: Low    
Commencement date: 1985 Expiry date:  
Legislative reference: Excise Tariff Act 1921

The benchmark rates for alternative fuels vary depending on energy content. The bio-fuels (ethanol and biodiesel) fuel tax rate is based upon the petrol and diesel rate. This gives rise to a negative tax expenditure for ethanol which is taxed at a higher rate than its benchmark. There is no tax expenditure for biodiesel as it is taxed at its benchmark rate.

The fuel tax on liquefied petroleum gas, liquefied natural gas and compressed natural gas began to be phased-in from 1 December 2011. The initial rate of excise a
pplying to these fuels will progressively increase each year until the final excise rate is reached on 1 July 2015, to reflect a tax rate discount of 50 per cent of each fuel’s respective benchmark fuel tax rate. This gives rise to a positive tax expenditure for these fuels, as they will be taxed at a lower rate than their respective benchmark rates.

Users of small, non-commercial scale, domestically-based compressed natural gas refuellers are exempt from paying excise duty on compressed natural gas used to fuel their vehicles.

The tax expenditure estimates do not include the impact of the Cleaner Fuels Grants Scheme and the Ethanol Production Grants Program, which are reported as expenditure programs for budget purposes.

F10 Excise levied on fuel oil, heating oil and kerosene
Fuel and energy ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
-455 -445 -470 -480 -560 -645 -745 -865
Tax expenditure type: Increased rate 2012 TES code: F10
Estimate Reliability: Medium — Low    
Commencement date: 1983 Expiry date:  
Legislative reference: Item 10 of the Schedule to the Excise Tariff Act 1921

The benchmark excise rate for fuels consumed for a purpose other than in an internal combustion engine is zero.

Since 1 July 2006, fuel oil, heating oil, and kerosene have been subject to an excise of 38.143 cents per litre. Users of these products are eligible for a fuel tax credit of 38.143 cents per litre that effectively removes the incidence of excise. The tax expenditure estimates do not include the impact of fuel tax credits which are reported as an expenditure program for budget purposes.

F11 Excise levied on fuel products used for purposes other than as fuel
Fuel and energy ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
-55 -55 -55 -55 -55 -55 -55 -55
Tax expenditure type: Increased rate 2012 TES code: F11
Estimate Reliability: Medium — Low    
Commencement date: 1 July 2006 Expiry date:  
Legislative reference: Item 10 of the Schedule to the Excise Tariff Act 1921

Since 1 July 2006, fuels consumed for a purpose other than in an internal combustion engine (such as toluene used as a solvent) are subject to excise of 38.143 cents per litre. Business users of these products are eligible for a fuel tax credit of 38.143 cents per litre that effectively removes the incidence of excise. The tax expenditure estimates do not include the impact of fuel tax credits which are reported as an expenditure program for budget purposes.

F12 Higher rate of excise levied on cigarettes not exceeding 0.8 grams of tobacco
Health ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
nfp nfp nfp nfp -1,885 -2,120 -2,465 -2,885
Tax expenditure type: Increased rate 2012 TES code: F12
Estimate Reliability: Medium — Low    
Commencement date: 1999 Expiry date:  
Legislative reference: Item 5 of the Schedule to the Excise Tariff Act 1921

Note: estimates for 2012‑13 and prior years are not reported consistent with statutory requirements relating to taxpayer confidentiality.

Cigarettes and cigars, not exceeding 0.8 grams of tobacco are subject to excise at a higher rate than the benchmark. The benchmark excise rate for tobacco products (including imported tobacco products) is based on weight (per kilogram of tobacco content) and applies to loose tobacco and to cigarettes and cigars with more than 0.8 grams of tobacco. Cigarettes and cigars with 0.8 grams or less of tobacco are subject to excise on a per stick basis.

F13 Concessional rate of excise levied on brandy
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
4 4 4 4 4 5 5 5
Tax expenditure type: Concessional rate 2012 TES code: F13
Estimate Reliability: Medium    
Commencement date: 9 November 1979 Expiry date:  
Legislative reference: Item 3 of the Schedule to the Excise Tariff Act 1921

Brandy is subject to a lower rate of excise than other spirits ($71.88 per litre of alcohol, compared to $76.98 per litre of alcohol as at 1 August 2013).

F14 Concessional rate of excise levied on brew-on-premise beer
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
5 4 4 4 3 3 3 3
Tax expenditure type: Concessional rate 2012 TES code: F14
Estimate Reliability: Medium    
Commencement date: 1993 Expiry date:  
Legislative reference: Item 1 of the Schedule to the Excise Tariff Act 1921

Brew-on-premise beer (that is, beer produced for non-commercial purposes using commercial facilities or equipment) is subject to a lower rate of excise than the benchmark rate of full strength beer packaged in individual containers not exceeding 48 litres.

F15 Concessional rate of excise levied on draught beer
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
160 160 155 155 160 165 175 185
Tax expenditure type: Concessional rate 2012 TES code: F15
Estimate Reliability: Medium    
Commencement date: 2001 Expiry date:  
Legislative reference: Item 1 of the Schedule to the Excise Tariff Act 1921

Draught beer (that is, beer packaged in individual containers exceeding 48 litres) is subject to a lower rate of excise than the benchmark rate of full strength beer packaged in individual containers not exceeding 48 litres.

F16 Concessional rate of excise levied on low strength packaged beer
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
10 9 8 8 7 6 6 7
Tax expenditure type: Concessional rate 2012 TES code: F16
Estimate Reliability: Medium    
Commencement date: 21 August 1984 Expiry date:  
Legislative reference: Item 1 of the Schedule to the Excise Tariff Act 1921

Low strength beer with an alcohol content of no more than 3 per cent packaged in containers not exceeding 48 litres is subject to a lower rate of excise than the benchmark rate of similarly packaged full strength beer.

F17 Consumption tax exemption for privately produced beer
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
45 45 40 40 45 45 45 50
Tax expenditure type: Exemption 2012 TES code: F17
Estimate Reliability: Medium    
Commencement date: 18 April 1973 Expiry date:  
Legislative reference: Schedule to the Excise Tariff Act 1921

Beer made for personal use by private individuals is exempt from the payment of excise.

F18 Consumption tax exemption for privately produced wine
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
10 10 10 11 11 12 12 13
Tax expenditure type: Exemption 2012 TES code: F18
Estimate Reliability: Medium    
Commencement date: 19 August 1970 Expiry date:  
Legislative reference: A New Tax System (Wine Equalisation Tax) Act 1999

Wine made for personal use by private individuals is exempt from the wine equalisation tax.

F19 Excise concession for breweries
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
.. .. .. 4 4 4 4 5
Tax expenditure type: Concessional rate 2012 TES code: F19
Estimate Reliability: Medium    
Commencement date: 2000 Expiry date:  
Legislative reference:
Paragraph 50(1)(zzd) of the Excise Regulations 1925

Breweries receive an excise refund of 60 per cent of excise paid, up to a maximum amount of $30,000 per financial year.

Prior to 1 July 2012, the concession was only available to microbreweries producing not more than 30,000 litres of product per annum. The maximum excise refund amount in any financial year was the lesser of $10,000 or 60 per cent of the excise paid.

F20 Increased rate of excise levied on excisable alcoholic beverages (other than beer) not exceeding 10 per cent alcohol
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
-490 -510 -515 -515 -530 -565 -595 -625
Tax expenditure type: Increased rate 2012 TES code: F20
Estimate Reliability: Medium    
Commencement date: 2000 Expiry date:  
Legislative reference: Item 2 of the Schedule to the Excise Tariff Act 1921

Excisable alcoholic beverages (other than beer) with an alcohol content not exceeding 10 per cent are subject to a higher rate of excise than the benchmark rate of full strength beer packaged in individual containers not exceeding 48 litres.

Under the benchmark, the first 1.15 per cent of alcohol content is not excisable. This excise-free threshold is not available to alcoholic beverages other than beer.

From 27 April 2008 the excise rate on these other excisable beverages increased to the same excise rate as applies to most spirits ($76.98 per litre of alcohol as at 1 August 2013).

F21 Wine equalisation tax producer rebate
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
240 250 280 300 320 340 350 370
Tax expenditure type: Rebate 2012 TES code: F21
Estimate Reliability: Medium    
Commencement date: 1 October 2004 Expiry date:  
Legislative reference: A New Tax System (Wine Equalisation Tax) Act 1999

Wine producers are able to claim a rebate of up to $500,000 of wine equalisation tax payable on eligible wine sales per financial year. The producer rebate was introduced on 1 October 2004 and the current maximum rebate was introduced on 1 July 2006. The rebate also extends to cider, mead, perry and sake.

F22 Luxury car tax
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
-500 -490 -440 -430 -400 -380 -410 -430
Tax expenditure type: Increased rate 2012 TES code: F22
Estimate Reliability: Medium    
Commencement date: 1 July 2000 Expiry date:  
Legislative reference: A New Tax System (Luxury Car Tax) Act 2000

The luxury car tax currently applies to cars that have a GST inclusive price over $59,133 (the luxury car tax threshold for the 2012‑13 financial year). However, the tax applies only to the GST exclusive value of the car that exceeds the luxury car tax threshold. As motor vehicle purchases are not taxed under the benchmark, the luxury car tax is a negative tax expenditure.

On 1 July 2008 the luxury car tax rate increased from 25 per cent to 33 per cent. ‘Primary producers‘ or certain tourism businesses that acquire a ‘refund-eligible car’ after 30 June 2008 are eligible to claim a tax refund of up to $3,000 of the amount of luxury car tax paid.

From 3 October 2008 a higher luxury car tax threshold has applied to fuel efficient cars. Eligible fuel efficient cars are subject to a threshold of $75,375 for luxury car tax purposes (for the 2012‑13 financial year).

F23 Certain exemptions for diplomatic missions and foreign diplomats
General public services — Foreign affairs and economic aid ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
1 1 1 1 1 1 1 1
Tax expenditure type: Concessional rate 2012 TES code: F23
Estimate Reliability: Medium — High    
Commencement date: 21 August 1940 Expiry date:  
Legislative reference: Regulation 50 of the Excise Regulations 1925 Section 10 of the Diplomatic Privileges and Immunities Act 1967 Section 10 of the Consular Privileges and Immunities Act 1972 Section 11 of the International Organisations (Privileges and Immunities) Act 1963
Section 12 of the Overseas Missions (Privileges and Immunities) Act 1995

Note: estimates represent excise duty only.

Excise, luxury car tax and wine equalisation tax are not payable (or an equivalent amount of that pa
id is claimable) for alcohol, fuel, motor vehicles and tobacco used for official purposes by diplomatic missions or for personal use by persons identified in the Diplomatic Privileges and Immunities Act 1967.

F24 Certain exemptions for Australian military sea vessels
Defence ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Concessional rate 2012 TES code: F24
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 2 August 1934 Expiry date:  
Legislative reference: Schedule 1 to the Excise Regulations 1925

Note: estimates represent excise duty only.

Excise on tobacco and certain alcoholic products is not payable by Australian military seagoing vessels in full commission when the products are consumed on board.

F25 Customs duty
Mining, manufacturing and construction ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
-2,530 -2,080 -2,700 -2,730 -3,000 -2,870 -2,750 -2,900
Tax expenditure type: Increased rate 2012 TES code: F25
Estimate Reliability: Medium — High    
Commencement date: 4 October 1901 Expiry date:  
Legislative reference: Customs Act 1901 Customs Tariff Act 1995

Customs duty is collected on certain goods imported into Australia. Under the benchmark, goods imported into Australia are free from customs duty (except for excise-equivalent customs duty).