The constitutional validity of state royalty schemes and profit-based schemes
Source: Australian Tax Forum Journal Article
Published Date: 1 Dec 2021
The current orthodox view is that state royalty schemes are constitutionally valid. This is based on a narrow reading of s 90 of the Australian Constitution, which prohibits states from levying excise duties. At its most basic, an excise is a tax on goods. This paper argues that, despite the orthodoxy, there are real constitutional question marks over the validity of state royalty schemes. This paper also considers the potential constitutional issues that might arise were a state to implement a profit-based scheme, rather than a royalty scheme. It finds that there would be a significant risk that such a scheme would be struck out on the basis of s 90, given that all parties in the High Court decision in Fortescue Metals proceeded on the basis that such a scheme would levy a tax. It is axiomatic that an excise is a kind of tax. The paper concludes that a High Court decision to this effect might precipitate a more fundamental re-think of how resource taxation is imposed in Australia. In other words, the subject matter of this article is considered to have important practical consequences for the nation, given the importance of our resources sector.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
- Published By: Anthony Gray
- Published On:1 Dec 2021
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page