Page 6009 - Week 18 - Thursday, 12 December 1991

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Commonwealth. As these amendments are only of a general housekeeping nature, no significant additional revenue is expected. I now present the explanatory memorandum for the Bill.

Debate (on motion by Mr Kaine) adjourned.


MS FOLLETT (Chief Minister and Treasurer) (12.09): I present the Liquor Tax Bill 1991. I move:

That this Bill be agreed to in principle.

Mr Speaker, liquor licensing fees imposed in the Territory are currently administered under the Liquor Act 1975. Under the existing legislation liquor fees are assessed annually on purchases by licensees during the previous financial year. This, in effect, allows licensees to trade for up to 17 months before tax liability passed on to consumers becomes payable to the Territory. Therefore, the Territory is presently exposed to losses through bankruptcies and bad debts in the liquor industry. In the past this exposure has led to significant amounts of lost revenue.

To overcome this problem, the Liquor Tax Bill provides for quarterly collection of liquor tax in advance of alcohol purchases by new licensees. Licensees will be required to pay an amount on initial grant of a licence, based on estimated purchases during the first two quarterly periods of operations. The estimated tax payable in advance of each subsequent quarterly period will be based on purchases during the quarter commencing six months prior to the quarter for which the tax is paid. In other words, tax due in advance of each quarter will be an estimate of the tax based on past transactions. This estimated tax will then be adjusted in accordance with actual purchases when the details are known. To further protect ACT revenues and ensure that the Territory receives all tax passed on to consumers, the Bill will ensure that any tax liability incurred in the last period of trading before termination of a licence is due and payable to the Territory.

Mr Speaker, it is impossible to bring existing licensees who are currently paying liquor fees up to 17 months in arrears into an advanced payment scheme without imposing a heavy financial burden on these licensees. Therefore, under the proposed legislation, existing licensees will be required to pay tax before the commencement of each quarterly period in respect of purchases in the quarter 15 months prior to the period to which the tax is paid. Such a scheme will reduce the arrears to 11 months. The Territory's exposure to bad debts would also be reduced through more timely and smaller payments by these licensees.

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