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2002
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
RADIOCOMMUNICATIONS
(TRANSMITTER LICENCE TAX) AMENDMENT BILL
2002
EXPLANATORY
MEMORANDUM
(Circulated by
authority of the Minister for
Communications, Information Technology and
the Arts,
Senator the Hon. Richard Alston)
RADIOCOMMUNICATIONS (TRANSMITTER LICENCE TAX) AMENDMENT
BILL 2002
OUTLINE
The Radiocommunications (Transmitter Licence Tax) Amendment Bill 2002
(the Bill) provides for the correction of an anomaly in the
Radiocommunications (Transmitter Licence Tax) Act 1983 (the Act) in
relation to the imposition of tax on a transmitter licence which does not
involve a person applying for the licence.
Commercial and community broadcasters are required to hold a licence under
both the Broadcasting Services Act 1992 (BSA) and the
Radiocommunications Act 1992. The broadcasting licence provides the
mechanism to control the content of the broadcast and a radiocommunications
licence or transmitter licence the technical provision for delivery of the
medium.
If a broadcasting licence is allocated to a person under Part 4
(commercial television and radio broadcasting licences) or Part 6 (community
broadcasting licences) of the BSA, the Australian Communications Authority (ACA)
must issue to that person a transmitter licence under section 102 of the
Radiocommunications Act for transmitting the broadcasting service. This occurs
by virtue of the combined operation of section 42 of the BSA and paragraphs
7(1)(f) and 8(1)(f) of Schedule 2 to the BSA, and section 102 of the
Radiocommunications Act. Section 42 of the BSA provides that each commercial
television broadcasting licence and each commercial radio broadcasting licence
is subject to the conditions set out in Parts 3 and 4 respectively of Schedule 2
of the BSA. Paragraph 7(1)(f) in Part 3 of Schedule 2 provides that a
commercial television broadcasting licensee is required to keep in a force a
licence under the Radiocommunications Act which allows the licensee to provide
that broadcasting service. Similarly, under paragraph 8(1)(f) in Part 4 of
Schedule 2 of the BSA a commercial radio broadcasting licensee is required to
keep in force a licence under the Radiocommunications Act which allows the
licensee to provide that broadcasting service.
Commercial broadcasters
pay a substantial annual fee for a broadcasting service licence based on the
revenue generated by their activities (see section 5 of the Television
Licence Fees Act 1964 and section 5 of the Radio Licence Fees Act
1964).
Tax is imposed for transmitter licences issued under the
Radiocommunications Act under the Radiocommunications (Transmitter Licence
Tax) Act 1983 (the Act). Subsection 6(1) of the Act provides that tax is
imposed on the issue of a transmitter licence that is issued for a period not
exceeding 12 months. Where a transmitter licence is issued for a period
exceeding 12 months, subsection 6(4) of the Act provides that the person
applying for the transmitter licence may choose to pay the licence tax by
instalments (by making an election to do so under subsection 6(3) of the Act) or
on the issue of the licence (by making an election to do so under subsection
6(2) of the Act).
This ability to pay licence tax by instalments was
introduced by way of amendments to section 6 of the Act in 1996 (by item 2 of
Schedule 1 to the Radiocommunications (Transmitter Licence Tax) Amendment Act
1995). Prior to this, tax was imposed on the grant of a transmitter
licence. These amendments have given rise to an anomaly in the imposition of
transmitter licence taxes on licences which do not involve a person applying for
the licence. The wording of subsections 6(2), 6(3), 6(4) and 6(5) of the Act
gives rise to difficulties in applying the Act to a transmitter licence issued
to commercial and community broadcasters under section 102 of the
Radiocommunications Act. The difficulties arise because subsections 6(2), 6(3),
6(4) and 6(5) of the Act refer to a person ‘applying for a transmitter
licence’. However, licences issued under section 102 of the
Radiocommunications Act are issued automatically, not upon
application.
The same difficulties also apply to the imposition of taxes
on transmitter licences issued to national and commercial broadcasters under
sections 100B and 102A of the Radiocommunications Act to enable the broadcasters
to transmit their television services in digital mode.
Section 100B
requires the ACA to issue a National Broadcasting Service (NBS) transmitter
licence that authorises the operation of a specified radiocommunications
transmitter for transmitting the NBS concerned in digital mode where, under a
digital conversion scheme in force under clause 19 of Schedule 4 to the BSA, the
ACA is required to issue an NBS transmitter licence to a national broadcaster
(ie. the ABC and the SBS). Similarly, section 102A requires the ACA to issue a
transmitter licence that authorises the operation of a specified
radiocommunications transmitter for transmitting the broadcasting service
concerned in digital mode where, under a digital conversion scheme in force
under clause 6 of Schedule 4 to the BSA the ACA is required to issue a
transmitter licence to a person who holds a commercial television broadcasting
licence. Like section 102 transmitter licences, these licences do not involve a
person applying for a licence. The ACA is required to issue these licences in
certain circumstances.
The Bill is therefore a technical measure to
correct the anomaly described above and will clarify the power to impose
transmitter licence tax on transmitter licences regardless of whether the person
has applied for a transmitter licence or not. The Bill also validates the
imposition of the transmitter licence tax on licences which are affected by the
anomaly and will enable the continued imposition of the transmitter licence tax
under the Act.
The Bill is not expected to have any financial impact on Commonwealth
expenditure or revenue.
ABBREVIATIONS
The following abbreviations are used in this explanatory
memorandum:
ACA: Australian Communications Authority
Act: Radiocommunications (Transmitter Licence Tax) Act 1983
Bill: Radiocommunications (Transmitter Licence Tax) Amendment Bill
2002
BSA: Broadcasting Services Act
1992
Radiocommunications Act: Radiocommunications Act
1992
NOTES ON CLAUSES
Part
1––Introduction
Clause 1 – Short
title
Clause 1 provides that the Bill, when enacted, may be cited as
the Radiocommunications (Transmitter Licence Tax) Amendment Act
2002.
Clause 2 – Commencement
Clause 2 provides that each provision of the Bill (specified in column 1 of
the table in clause 2) will commence on the day or at the time specified in
column 2 of the table in clause 2. The table in clause 2 provides that item 1
of Schedule 1 to the Bill will be taken to commence on 29 March 1996 and that
item 2 of Schedule 1 commences on the day on which the Bill receives the Royal
Assent. Clauses 1 to 3 of the Bill, and anything not in items 1 and 2 of
Schedule 1 to the Bill, commence on day on which the Bill receives the Royal
Assent.
Clause 3 provides that the Bill amends each Act as specified in a Schedule to
the Bill. There is one Schedule to the Bill. This Schedule (Schedule 1)
provides for amendments to the Radiocommunications (Transmitter Licence Tax)
Act 1983.
Proposed item 1 provides for the addition of a number of subsections to
section 6 of the Act. The effect of these additional subsections will be that a
person issued with a transmitter licence for more than 12 months under section
100B, 102 or 102A of the Radiocommunications Act will be required to elect,
prior to being issued with the transmitter licence, whether the transmitter
licence tax in respect of the period of the licence will be paid upon issue of
the licence or by instalments.
Proposed subsection 6(9) requires that
before a person is issued with a transmitter licence for a period exceeding
twelve months under section 100B, 102 or 102A of the Radiocommunications Act,
the person must elect in writing (in a form approved by the ACA) whether
proposed subsection (7) or proposed subsection (8) is to apply in respect of the
transmitter licence. If a person elects that proposed subsection (7) will
apply, tax will be imposed upon the issue of the licence for the period the
licence is in force. If a person elects that proposed subsection (8) will apply
to the licence, tax will be imposed on the issue of the licence and on each
anniversary of the day the licence came into force occurring during the period
the licence is in force. Proposed subsection (8) operates subject to proposed
subsections (11) and (12) (which are detailed below).
Proposed
subsection (10) provides that if the person does not make an election under
proposed subsection (9) before the transmitter licence is issued, the person
will be taken to have elected, before the licence is issued, that proposed
subsection (8) applies in respect of the licence. This would result in the
transmitter licence tax being payable by instalments.
Proposed
subsection (11) provides that if:
a) the holder of a transmitter licence
elects, before the licence is issued, that proposed subsection (8) will apply;
and
b) subsequently notifies the ACA that proposed subsection (11) is to
apply (provided that the notice to the ACA is at least 21 days before the next
anniversary of the day that the licence came into force that is more than 12
months before the end of the period that the licence is in force),
proposed subsection (8) will cease to apply and tax will be imposed on
the holding of the licence on the anniversary.
Proposed subsection (11)
would also apply where the holder of a transmitter licence is deemed to have
elected (under proposed subsection (10)) that proposed subsection (8) apply.
This effectively provides a mechanism whereby the holder of a licence may choose
to pay tax with respect to the remainder of the period of the licence upfront at
any time during the period of the licence, provided the holder of the licence
chooses to do so at least 21 days before the anniversary of the issue of the
licence and there is more than 12 months before the period of the licence
expires.
Proposed subsection (12) provides that if a licensee has elected
that proposed subsection (8) will apply, before a licence is issued, and the
licensee fails to pay an instalment within 60 days after the anniversary of the
issue of the licence, proposed subsection (8) will cease to apply. Proposed
subsection (12) would also apply where the holder of a transmitter licence is
deemed to have elected (under proposed subsection (10)) that proposed subsection
(8) apply. This effectively means that, if an instalment is not paid within 60
days after the anniversary of the issue of the licence, the right to pay by
instalments will be lost and the full tax for the period of the licence will
become payable.
Item 2 – Transitional – deeming provisions for the transition
from tax purportedly imposed on issued licences to tax actually
imposed
The transitional provisions apply to an “issued
licence”. An “issued licence” is a transmitter licence issued
for a period of more than 12 months under section 100B, 102 or 102A of the
Radiocommunications Act 1992 before proposed item 2 commenced
(proposed subitem (1)).
The transitional provisions ensure that the
transmitter licence tax is payable in respect of transmitter licences issued
before the commencement of proposed item 2 but which did not involve a person
applying for a licence. The purpose of the transitional provisions is to
correct the anomaly that has existed since 29 March 1996 (discussed in the
outline) by providing that elections that were purportedly made by persons who
were issued with a licence (but who did not apply for the licence) are legally
valid elections.
Proposed paragraph (a) of subitem 2(2) provides that
where a person (before the commencement of proposed item 2) purportedly elected
that subsection 6(2) of the Act apply to an issued licence, the person will be
taken to have elected at that time that proposed subsection 6(7) apply to the
licence. This ensures that the election made by the person that the tax on the
licence be paid in a lump sum is legally valid.
Similarly, proposed
paragraph (b) of subitem 2(2) provides that where a person (before the
commencement of proposed item 2) purportedly elected that subsection 6(3) of the
Act apply to an issued licence, the person will be taken to have elected at that
time that proposed subsection 6(8) apply to the licence. This ensures that the
election made by the person that the tax on the licence be paid by instalments
is legally valid.
Proposed subitem 2(3) provides that a person who
(before proposed item 2 commenced) paid an amount that purported to be an amount
imposed by subsection 6(2), (3), (5) or (6) of the Act in respect of an issued
licence is taken to have paid the equivalent tax imposed on the licence by
proposed subsection 6(7), (8), (11) or (12).
Proposed subitem 2(4)
provides that where a person (before the commencement of proposed item 2)
purportedly notified the ACA that subsection 6(5) of the Act apply to an issued
licence, the person will be taken to have notified the ACA at that time that
proposed subsection 6(11) apply to the licence.
Proposed subitem 2(5)
relates to determinations made under section 7 of the Act. Section 7 of the Act
provides that the amount of tax payable in respect; of the issue of a
transmitter licence, the anniversary of a transmitter licence coming into force
or on the holding of a transmitter licence, is of an amount that the ACA
determines. Such a determination is a disallowable instrument (see subsection
7(4) of the Act). Proposed subitem 2(5) provides that any reference to
subsection 6(2) of the Act in such a determination will be taken to include a
reference to proposed subsection 6(7). Similarly, proposed subitem 2(5)
provides that any references to subsections 6(3), 6(5) and 6(6) of the Act in
such a determination will be taken to include a reference to proposed
subsections 6(8), 6(11) and 6(12) respectively. Proposed subitem 2(5) is
necessary to ensure that the current anomaly (discussed in the outline) is
corrected by including references to proposed subsections 6(8), 6(11) and 6(12)
in determinations by the ACA of the amount of tax applying to a transmitter
licence that were made prior to the correction of the
anomaly.