Appendix B: Classification of Australian Government taxes

Changes in the classification of transactions generally can arise from changes in the financial reporting standards on which the Australian Government budget documents are based and ongoing reconciliation of Australian Bureau of Statistics (ABS) and budget statistics.

Classification changes affect historical reporting. Therefore, comparisons between budget year publications can be misleading. A list of significant classification changes to revenue items in various budgets is provided below.

2009-10

Excess contributions tax (ECT) is a tax that taxpayers are liable to pay on contributions made to their superannuation that exceed their concessional, transitional or non-concessional contributions cap. The cap amount and how much extra tax must be paid once the cap is exceeded depends on whether the contributions are concessional, transitional or non-concessional. As part of the 2009-10 Budget the concessional and transitional caps were lowered.
Categories of excisable products reported are changed to protect taxpayer confidentiality. Revenue from crude oil and condensate excise cannot be published separately without risking the disclosure of sensitive commercial information in relation to the tax affairs of potentially identifiable businesses. A category of ‘other excisable products’ is introduced that comprises the previous categories of ‘other fuel products’, ‘crude oil and condensate’, ‘spirits’ and ‘other excisable beverages’.

2008-09

GST was reclassified as an Australian Government tax, in accordance with ABS Government Finance Statistics’ (GFS) and Australian Accounting Standards (AAS). Since the introduction of the GST in 2000-01, the GST had been reported in budgets as a State Government tax and was therefore excluded from total Australian Government tax revenue. The impact of this change is outlined in the 2008-09 Budget (Budget Paper No. 1, box 5, page 5-26).
As a consequence of the change to GST reporting, there are two related changes.
- GST non-general interest charge (GIC) penalties are reclassified to be reported with GST. In the previous budgets, the GST non-GIC penalties were reported under ‘other tax’.
- The level of reported cash GST receipts is adjusted by a small amount for GST collected by Commonwealth agencies but not yet passed to the ATO at the end of each financial year.
The wine equalisation tax (WET) and luxury car tax (LCT) are reclassified under ‘sales taxes,’ along with the GST. The WET and LCT were previously classified under ‘other tax’.

2006-07

Fringe benefits tax (FBT) was reclassified under ‘income tax’ from ‘other tax’. This was due to a change in ABS’s classification of FBT under the Government Financial Statistics (GFS) standard such that it is now considered a tax on the income of individuals.
- The value of reported FBT increased by the value of tax on fringe benefits provided by Australian Government agencies to their employees. These transactions were no longer classified as internal to government (that is tax payments by Australian Government agencies to the Australian Government) but rather as transactions between individuals and the government.
The WET and LCT were reclassified under ‘other tax’. The items were previously classified under ‘indirect tax’.
Broadcasting licence fees and other levies were aggregated and reclassified under ‘other tax’. These items were previously reported separately under ‘other tax’.

2002-03

Gross income tax withholding was previously reported as two separate items: gross PAYG (withholding) and other withholding. ‘Other withholding’ was previously reported under ‘company and other income tax’. This includes amounts withheld for failure to quote a tax file number or an Australian business number, interest, dividends and royalty payments to non-residents, and payments to aboriginal groups for the use of land for mineral exploration and mining.

2001-02

Medicare levy was reclassified to be included within ‘gross PAYG withholding’, ‘gross other individuals’ and refunds. Previously, it was identified as a separate item under ‘individuals’ income tax’.

2000-01

PAYG system replaced pay as you earn system (PAYE), prescribed payments system (PPS) and reportable payments system (RPS).
- Tax withheld under ‘gross PAYE’ is now recorded as ‘gross PAYG withholding’.
- Under the PAYG system, individuals in the PPS who qualify for an ABN may choose to enter into voluntary withholding arrangements. Tax withheld from such individuals (estimated to be around $800 million in 2000-01) is recorded under ‘gross PAYG withholding’.
- The remaining tax that would have been collected under PPS is now collected through the PAYG instalment system or as payments on assessment. These payments (estimated to be around $1.9 billion in 2000-01) are generally recorded under the ‘gross other individuals’ head of revenue.

1999-2000

From 1999-2000 the taxation revenue figures have been based on the GFS framework of accrual accounting. Prior to this, accrual figures did not exist (the taxation figures were based on the Commonwealth Budget Sector cash accounting framework).

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