Statement 5: Revenue (Continued)
In 2011‑12, total receipts are expected to grow by 9.3 per cent ($28.0 billion), on the back of a pick‑up in individuals' income tax growth of 11.3 per cent ($15.3 billion) and a bounce‑back in company tax growth of 19.9 per cent ($11.2 billion).
In 2012‑13, total receipts are forecast to grow by a further 11.8 per cent ($38.8 billion), reflecting 8.1 per cent ($12.3 billion) growth in individuals' income tax receipts, 8.9 per cent ($6.0 billion) growth in company tax receipts, and 10.5 per cent ($8.7 billion) growth in indirect taxes.
In the projection years, total receipts are forecast to grow by 6.4 per cent ($23.8 billion) in 2013‑14, 5.4 per cent ($21.1 billion) in 2014‑15 and by 6.0 per cent ($24.8 billion) in 2015‑16.
Individuals' income and other withholding taxation receipts
Table 8: Individuals' income and other withholding taxation receipts
Gross income tax withholding
Receipts from gross income tax withholding are expected to grow by 9.7 per cent ($12.5 billion) in 2011‑12, reflecting growth in wages and salaries.
In 2012‑13, gross income tax withholding receipts are forecast to increase by 5.9 per cent ($8.4 billion), reflecting more modest growth in wages and salaries.
In the projection years, receipts from gross income tax withholding are expected to grow by 8.8 per cent ($13.3 billion) in 2013‑14, 6.6 per cent ($10.8 billion) in 2014‑15 and 6.1 per cent ($10.7 billion) in 2015‑16, reflecting longer‑term growth in wages and salaries, partly offset by the effect of personal tax cuts brought about by the Clean Energy Future Package.
Gross other individuals
Gross other individuals receipts are expected to grow by 12.6 per cent ($3.5 billion) in 2011‑12, largely reflecting growth in non‑wage income.
In 2012‑13, receipts from gross other individuals are expected to grow by 13.4 per cent ($4.2 billion), reflecting growth in non‑wage income.
In the projection years, receipts from gross other individuals are expected to grow in line with longer‑term trends in non‑wage income.
Income tax refunds for individuals
Income tax refunds for individuals, which have a negative impact on receipts, are expected to grow by 3.6 per cent ($889 million) in 2011‑12, mainly reflecting 2010‑11 individuals' income.
Individuals' tax refunds are then expected to grow by 2.5 per cent ($640 million) in 2012‑13, largely reflecting a bring‑forward of the low‑income tax offset.
In the projection years, refunds for individuals are expected to return to longer‑term trend growth.
Fringe benefits tax
Receipts from fringe benefits tax (FBT) are expected to grow by 5.4 per cent ($177 million) in 2011‑12, reflecting wages and employment growth.
In 2012‑13, FBT is expected to grow by 10.1 per cent ($350 million), in part reflecting the positive impact of the revised policy treatment of FBT on cars.
Over the projection years, FBT is expected to return to longer‑term trend growth.
Company and other related income taxation receipts
Table 9: Company and other related income taxation receipts
(a) Resource rent taxes include PRRT and gross receipts from the MRRT. Net receipts from the MRRT are expected to be $3.0 billion in 2012‑13, $3.5 billion in 2013‑14, $3.2 billion in 2014‑15 and $3.7 billion in 2015‑16, which represent the net impact on receipts across several different heads of revenue. These include the offsetting reductions in company tax (through deductibility) and interactions with other taxes.
Company tax is forecast to grow by 19.9 per cent ($11.2 billion) in 2011‑12, reflecting the lagged effect of the economic recovery on tax collections following the global financial crisis. In 2012‑13, company tax receipts are expected to grow by 8.9 per cent ($6.0 billion), as strengthening economic conditions since the financial crisis continue to flow into tax collections.
Over the projection years, receipts from company tax are expected to grow by 3.9 per cent ($2.9 billion) in 2013‑14, 5.2 per cent ($4.0 billion) in 2014‑15 and 4.9 per cent ($4.0 billion) in 2015‑16, reflecting more normal rates of growth in gross operating surplus.
Receipts from superannuation funds are expected to grow by 10.9 per cent ($711 million) in 2011‑12 and 11.3 per cent ($820 million) in 2012‑13, reflecting the ongoing recovery from the global financial crisis in wages and salaries growth and asset prices, which increase contributions and earnings from superannuation funds.
In the projection years, receipts from superannuation funds increase by 11.9 per cent ($960 million) in 2013‑14, 19.9 per cent ($1.8 billion) in 2014‑15, and 17.7 per cent ($1.9 billion) in 2015‑16. The acceleration in growth in superannuation tax over the projection years reflects stronger capital gains growth as asset markets recover and the effect of crisis‑related losses on tax positions unwinds. It also reflects policy changes, including the phased increase in the superannuation guarantee charge to 12 per cent, and the measure announced at this Budget to reduce the tax concession which very high income earners receive on their concessional contributions.
Resource rent taxes
Resource rent taxes include the petroleum resource rent tax (PRRT) and the minerals resource rent tax (MRRT). They can be highly variable as they are heavily influenced by movements in the exchange rate and relevant commodity prices. The introduction of the MRRT in 2012‑13 gives a one‑off boost to the revenue base and growth rate in that year.
Receipts from resource rent taxes are expected to increase by 87.3 per cent ($704 million) in 2011‑12, reflecting high commodity prices and high levels of production.
Receipts from resource rent taxes are expected to grow substantially in 2012‑13, reflecting the commencement of the MRRT.
Over the forward years, receipts from resource rent taxes are expected to reflect the projected changes in the commodity price cycle and some additional fields paying PRRT coming on stream.
Box 3: The company tax payments system during a downturn
The design of the company tax payments system may result in counter‑intuitive payment patterns following a downturn. The majority of company tax is paid in quarterly instalments, which are calculated from quarterly turnover and a rate based on the most recently assessed tax return. There is also a balancing payment or a refund upon lodgement of the tax return six months after the income year.
Chart A shows an illustrative example, with the 'pre‑downturn' being a 'normal' year, with no balancing payment required. In the downturn year (year 0), instalments fall due to lower turnover, but the company still receives a refund (the negative bar in year 1) because the instalment rate reflects pre‑downturn profits.
During year 1, when turnover returns to normal, the company will receive its new, lower, instalment rate. It will therefore pay lower instalments which, combined with the refund from year 0, makes year 1 the lowest year of tax paid over the cycle. The company will under‑pay its tax in year 1 and pay a balancing payment in year 2. This effect will broadly repeat in year 2, with the company still operating on the lower instalment rate. Instalments return to 'normality' in year 3 which, combined with the balancing payment from year 2, makes this the peak year for tax payments.
This stylised example illustrates that a downturn takes several years to flow through the company tax payments system and results in very high growth rates of total tax paid several years afterwards. Downturns may spread over more than one year and, as companies operate on various accounting years, the effects may extend even further. This example does not consider a company making a loss, which is 'carried forward' and offset against future years' income, potentially generating even higher growth rates as income returns to normality (Box 3, Statement 5, 2010‑11 Budget).
Chart A: Cash payments for an example company through a downturn
Source: Treasury estimates.
Sales taxation receipts
Table 10: Sales taxation receipts
Goods and services tax
Goods and services tax (GST) receipts are expected to decline by 0.8 per cent ($354 million) in 2011‑12, reflecting weak year‑to‑date collections as well as softness in dwelling investment.
In 2012‑13, receipts from GST are expected to grow by 5.7 per cent ($2.6 billion), reflecting growth in taxable consumption and dwelling investment as well as increased compliance measures.
In the projection years, GST receipts are expected to grow by 5.6 per cent ($2.7 billion) in 2013‑14 and 5.1 per cent ($2.6 billion) in 2014‑15 and 4.8 per cent ($2.6 billion) in 2015‑16, in line with trend growth in consumption.
Other sales taxes
Other sales taxes include the wine equalisation tax and the luxury car tax.
Luxury car tax (LCT) receipts are expected to decline by 8.9 per cent ($43 million) in 2011‑12, reflecting subdued growth in luxury car sales during the year. LCT receipts are expected to increase by 2.3 per cent ($10 million) in 2012‑13, reflecting a modest bounce back in sales. A return to longer term growth is expected over the projection period.
Wine equalisation tax (WET) receipts are expected to remain broadly unchanged in 2011‑12. In 2012‑13, receipts from the WET are expected to grow by 6.9 per cent ($50 million), reflecting modest growth in wine consumption. Receipts from the WET are expected to grow in line with longer‑term growth rates over the projection years.
Excise and customs duty
Table 11: Excise and customs duty receipts
(a) Other excisable beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).
Receipts from excise are expected to be broadly unchanged in 2011‑12, reflecting the balance of declines in alcohol and tobacco excise and gains in diesel and petrol excise. In 2012‑13, excise receipts are expected to increase by 4.3 per cent ($1.1 billion), partly reflecting continued strong growth in diesel excise. In the projection years, excise duties are expected to grow in line with long‑term trends.
Excise duties on tobacco over the forward years are affected by the scheduled relocation overseas of a large tobacco producer, which reduces excise and raises customs duty.
Table 12: Excise rates(a)
(a) The rate of excise on crude oil and condensate is not provided in this table as it varies according to the quantity sold, the sale price, and the dates of discovery and development of the oil field.
Table 13: Customs duty tariff rates
(a) The general tariff of 5 per cent applies to most manufactured goods. Many goods, including primary products, textiles, clothing and footwear and other manufactured goods have a free rate of duty.
(b) This category includes new passenger vehicles and off‑road vehicles and parts. Used or second‑hand passenger vehicles are subject to an additional impost of $12,000.
Customs duties are expected to grow by 27.3 per cent ($1.5 billion) in 2011‑12, reflecting higher expected receipts from tobacco and passenger motor vehicles.
In 2012‑13, customs duty receipts are expected to grow by 6.2 per cent ($430 million), reflecting higher expected receipts from tobacco, general goods and passenger motor vehicles.
In 2013‑14, customs duty is expected to increase by 16.3 per cent ($1.2 billion), partly reflecting the effect of the relocation of a large tobacco producer offshore. Customs duties are expected to return to more normal rates of growth by 2015‑16.
Carbon Pricing Mechanism
Receipts from the carbon pricing mechanism are expected to be around $24.7 billion over the forward estimates period.
Table 14: Carbon pricing mechanism receipts
The carbon pricing mechanism will commence from 1 July 2012, with a fixed price period of three years (commencing at $23 in 2012‑13). Liable entities will be required to surrender a carbon unit for every tonne of covered greenhouse gas they emit.
The scheme will transition to a flexible price from 2015‑16 and be linked to the international market. Under the flexible price an overall limit (or emissions cap) will be placed on annual greenhouse gas emissions from covered sources. In the flexible price period, international carbon prices are expected to set the domestic carbon price.
The increase in receipts from 2012‑13 to 2013‑14 largely reflects the surrender obligations for the fixed price period, where liable entities are required to surrender permits for 75 per cent of their emissions liability in the relevant compliance year and the remainder in the following compliance year. The decrease in receipts from 2014‑15 to 2015‑16 largely reflects lower emissions from moving to a pollution cap.
The receipt estimate for 2015‑16 incorporates an international carbon price of around $29, based on Treasury modelling in Strong Growth, Low Pollution. For further detail see Box 1, Statement 3.
Other taxation receipts
Other taxation receipts are expected to decline by 8.9 per cent ($244 million) in 2011‑12, reflecting weaker collections, and increase by 17.1 per cent ($426 million) in 2012‑13, reflecting the Government's decision to implement the Cooper Review reforms that streamline the superannuation system and the increase in the passenger movement charge.
Table 15: Other taxation receipts
Non‑tax receipts are expected to decline by 4.1 per cent ($862 million) in 2011‑12 from 2010‑11 as a consequence of lower dividends and interest receipts.
Non‑tax receipts are expected to increase by 26.3 per cent ($5.3 billion) in 2012‑13, reflecting an increase in the sale of non‑financial assets, increased interest received by the Future Fund and higher dividends from Government Business Enterprises.
Table 16: Non‑taxation receipts
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