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	Murdoch University Electronic Journal of Law

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Title : Review of Western Australian State Taxes -
: Federal Instutions Duty and Debit Tax
Author : Tax Policy Elective 1993
Organisation : School of Law, Murdoch University
Language : English
Keywords : TAXATION, WESTERN AUSTRALIA, EQUITY,
: EFFICIENCY, SIMPLICITY, REFORM
Abstract : See abstract for Preface and Introduction
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elaw/comment/watax/chap3.txt
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1 INTRODUCTION

The Financial Institutions Duty ("FID") and Debits Tax are
taxes imposed upon certain financial transactions. The
two taxes operate independently with FID applying to
deposits and Debits Tax applying to withdrawals from
certain financial institutions. This chapter will first
examine the operation and tax policy implications of FID
then the operation and tax policy implications of Debits
Tax and finally make recommendations as to how the two
taxes could possibly be improved.


2 FINANCIAL INSTITUTIONS DUTY (FID)

2.1 Outline of FID

The preamble to the Financial Institutions Duty Act 1983
(WA) describes the W.A. FID as being :

...a duty upon certain receipts, deposits,
liabilities and investments of financial
institutions and other persons...

Essentially the duty is imposed in three different types
of situations. First a duty of 0.06% is imposed on the
receipts of registered financial institutions (RFI's)
(s10); second, a concessional rate of either 0.004% or
0.005% applies to the short term money market dealings of
short term dealers (STD's) (s11); third, a duty of 0.06%
is imposed on depositors transacting with unregistered
financial institutions (s12).

The third situation, imposing liability upon depositors of
unregistered financial institutions is supposed to catch
deposits made to financial institutions which should be
registered but for some other reason (such as legislation
specifically excluding them) are not so registered.
Section twelve is an anti-avoidance provision and has not
been resorted to thus far. Therefore we need only
consider receipts by RFI's and STD's.


3 DEPOSITS TO REGISTERED FINANCIAL INSTITUTIONS

The term `Financial Institutions' covers a range of
institutions including banks, building societies, credit
unions, finance companies, cash management trusts and
similar bodies. However an FI is only liable to the duty
if it is registered, that is, either where its' receipts
for the preceding year and exceed $5 million or if during
a preceding month its' receipts exceed $416 666 (s22). A
registered FI is liable to a duty of 0.06% (to a maximum
of $1200) on each receipt of money in WA during a month,
except for those receipts exempted.

Receipts are exempted if paid into an exempt account (s10
(4)(a)) or if they are of a type specifically exempted in
the Act or the regulations. The rationale behind the
various exemptions varies, however there seems to be three
underlying principles upon which exemptions are granted.
First, some accounts and receipts are exempted to prevent
"double dipping", for example where a non-bank FI deposits
its receipts to an account held by a bank.(1) Second, other
exemptions apply to transactions which are not strictly
receipts; for example money for money transactions such as
foreign exchange transactions which are not deposited into
a person's account (s10(4)(f)). Third, certain exemptions
apply as a matter of policy. These include:

-local government and government department
accounts;(2)
-trust fund and charitable institutions accounts;(3)
-receipts by superannuation schemes;(4)
-insurance companies and medical benefits funds;(5)
-various welfare benefits and Defence Service Homes
loan repayments;(6)
-mortgage repayments.(7)

The tax policy elective suggests that many if not all of
the exemptions based on political policy should be removed
thus increasing the broadness of the tax-base and
simplifying the administration of the duty.


4 SHORT TERM DEALINGS

The concessional rate which applies to short term dealings
of STD's is a recognition of the special nature of the
short term money markets in that they are characterised by
a rapid turnover of funds.(8) The lower rate seems to be
aimed at the types of transactions which would typically
be carried out by financial institutions in accommodating
the proceeds of their day-to-day operations. The
concessional rate applies only to transactions of over
$50,000 and for a period of less than 185 days duration.(9)
A distinction is made between "certified" short term
dealers and "prescribed" short term dealers. Certified
dealers are those who are typically involved at the
wholesale end of the financial market, for example
merchant or trading banks and official dealers. These
dealers usually have Australia-wide operations and are
charged duty at a rate of 0.005% on an average monthly
basis on one-tenth of their Australia-wide short term
liabilities (s11(1)).(10)

Prescribed short term dealers are usually financial
institutions who invest in the short term money markets as
a subsidiary part of their operations. Prescribed STD's
are further divided into those which are building
societies, credit unions or RFI's with less than half
their short term dealings giving rise to short term
liabilities (s 26(4)(a)) and non-registered financial
institutions (s 26(4) (b)). The rate which applies to
prescribed STD's is 0.004% of their average daily short
term liabilities or short term investments (s11(4)&(5).

5 COMPARISON OF FID WITH THE CRITIERIA FOR `IDEAL' TAX

5.1. Revenue Generation

FID has made only modest contributions to State revenue
collections over the years; ranging between approximately
3-7% of annual taxation revenue for the years between 1983
and 1992.(11) However it has created more revenue than the
Stamp Duties it replaced due to these of the broader tax
base it covers. For example, in its first six months of
operation, after taking into account the loss of revenue
from the stamp duties abolished, estimates put the net
additional revenue received through FID at over $9
million.(12) It must also be noted that for the three full
years that FID accounted for only around 3% of total tax
revenue (1986/7 through to 1988/9), the standard rate of
duty was 0.02%. Since that time the rate has increased to
0.06% and revenue has improved to between 6-7% of total
tax revenue.

The revenue generating capacity of FID is determined by
the rates at which it operates and the broadness of its
application. Two factors have been seen as determining
rate increases to FID. Firstly, rate increases may make
avoidance more worthwhile and secondly, there is a
commercial and political disadvantage in being the State
with the highest rate of FID. With primary rates in other
States ranging from 0.04% (Tasmania) to 0.08% (ACT), there
would seem little chance of a significant increase in the
WA rate. The lack of a FID in Queensland also makes the
issue of avoidance a real possibility if the rate is
increased considerably. A further broadening of the tax
base would seem to be a more viable (but also limited)
means of increasing revenue generating.

_The Tax Policy Elective recommends uniformity between the
FID regimes in all of the States_

5.2. Simplicity

The administrative ease by which a tax can be collected
and its ability to be readily complied with are an
essential part of an ideal tax, often referred to as its
simplicity. Factors which are indicative of the
simplicity of a tax include:
-few collection points
-uniform tax rates
-stability
-revenue buoyancy
-public acceptability
-flexibility.

Few collection points: As FID is only imposed on
registered FI's and STD's collection of the duty is
simplified. The fact that there is a prescribed level of
receipts before an FI is required to register
significantly reduces the number of collection points.
Also, the fact that the duty is submitted monthly further
reduces the number of returns of the duty. In this
respect FID is simple, however the complexities of
determining whether an institution is an FI and further an
RFI, whether an STD is prescribed or certified STD and
whether a receipt is dutiable or not often results in
unintentional avoidance of the duty and complicates
compliance and policing of the FID system difficult.

Uniform tax rates: Apart from there being three different
rates of FID the rates also apply on differing bases - on
deposits; one-tenth of average daily short term
liabilities for a month; average daily short term
investments for a month or average daily short term
liabilities for a month. Obviously the variety of rates
and bases upon which the duty is applied compromises the
simplicity of the duty.

Stability: The relative stability of FID revenue is
difficult to judge because of the numerous alterations to
the rate of duty since its inception.(13) These changes
make comparisons with other taxes and inter-period
comparisons difficult. However, there is nothing to
suggest that FID is any more or less susceptible to
changes in economic or other factors.

Revenue buoyancy: Revenue buoyancy can be associated with
how consistent the tax is as a source of revenue. The
rate changes and minor alterations to the tax base through
amendments to exemptions have made it difficult for the
annual revenue from FID to be accurately estimated. A
comparison of yearly estimates with actual collections
shows FID to be slightly more predictable than other taxes
on average.(14)

Public acceptability: FID was subject to a process of
consultation with financial institutions during the
drafting of the legislation. There was also a review of
its operation after the first six months, again with input
from the finance sector, which resulted in various
amendments to the Act. In this respect the government has
sought to make FID more acceptable to the public which
encourages compliance and helps with the collection of the
duty. The ability of the RFI's to pass on the duty to
their clients(15) also makes the duty more acceptable to
financial institutions. However the financial
institutions still bear the costs of collecting the duty
(although it is arguable that this too can be passed on
indirectly to customers). Generally FID does not seem to
be unpopular enough to affect the simplicity of the duty.
Flexibility: The changes of rates of the duty in the past
has illustrated the flexibility of FID in according with
changes in the economic climate and changes in the rates
of duty prevalent in other States. Also the ability to
"make regulations prescribing all matters required or
permitted by [the] Act" (s 77), increases the flexibility
of FID.

5.3. Efficiency

The FID tax was introduced in 1984 for two reasons.
Firstly, it eliminated several inefficient and inequitable
stamp duties on this type of transactions. These included
stamp duty on credit businesses, instalment purchases and
on the issue of promissory notes.(16)

The second reason was to achieve a degree of micro
economic reform. The situation prior to 1984 was such as
to make trading on the Short Term Money Market (`STMM') in
Western Australia expensive. Other States such as New
South Wales and Victoria had already introduced FID and
eliminated all of the other stamp duties effecting the
STMM. As explained above the STMM dealers are liable for
a smaller impost under the FID regime. Thus the Western
Australian STMM dealers (who still had to pay stamp
duties) were liable to much more tax than their Eastern
States counter parts and FID was introduced as a measure
to stop STMM trade leaving Western Australia.(17)

5.3.1 Banking Habits

FID may cause distortions by affecting people's banking
habits. A tax on deposits will discourage savings in that
people will try to avoid it. However, because FID is
taxed at such a low rate (0.06%) and liability is not
incurred until some time after the deposit is made, it
could be argued that many will ignore the liability that
depositing creates. Having a tax on deposits may,
however, still cause some people to invest in areas that
don't attract FID or to avoid investing altogether. FID
may also tend to encourage very large transactions (over
two million dollars) due to the $1200 limit on FID for any
one transaction. The effect of the limit per transaction
is to is that no tax is payable for every dollar over the
$2 million threshold.(18)

_The Tax Policy Elective recommends the abolition of the
limit on the maximum Financial Institutions Duty payable
on any transaction._

5.3.2 Investment Choices

Another efficiency consideration arises due to the fact
that non-bank financial institutions (such as Hospital
Benefit Funds, superannuation funds and insurance
businesses) are exempt from FID.(19) This may tend to
encourage people to put their money in superannuation
funds, to a greater extent than would represent the most
efficient use of their money.

5.3.3 Compliance

The FID legislation is, as we have seen, complicated.
Thus compliance with the rules may be difficult,
especially for non-standard transactions.(20) In situations
where taxpayers are unsure of their liability under the
Act it has been suggested(21) that they will try to avoid
coming within the ambit of the legislation as a means of
resolving their confusion as to liability. Such
distortions in behaviour indicate that the current design
of the tax offends the principle of efficiency.

5.4. Equity

5.4.1 Short Term Money Market

The greatest equity consideration that arises under the
FID regime deals with the STMM provisions. At the moment
STMM dealers pay very little tax due to the way in which
the tax is imposed. Not only do the dealers have to pay a
very small percentage of the amounts that they transfer,
but the tax is calculated on the balance of the dealer's
STMM account at the end of each day. According to the NSW
Tax Task Force Report it is a common practice for STMM
dealers to transfer all of their funds to overseas
accounts just prior to the end of the day so that the
markets in other time zones can be utilised.(22) Thus the
liability of STMM dealers is very small indeed. In the
NSW Report it was noted that even though billions of
dollars are being moved around each year, the tax
collected from STMM dealers was only 6.5% of the total FID
revenue.(23)

The STMM provisions were introduced to recognise the
nature of the STMM which is characterised by a rapid
turnover of funds. It was hypothesised that to tax the
dealers at the same rates as everyone else would offend
horizontal equity in that the dealers would have a
disproportionate level of tax liability with little scope
to pass it on. However, the current legislation breaches
horizontal equity in that the dealers pay very little tax.
Clearly some sort of medium stance should be reached.

We would contend that it is trite to say that the dealers
could not pass on a greater tax liability to their
clients. It would be far more equitable if STMM dealers
were taxed just like every one else.

The STMM provisions also breach vertical equity in that
people from the wealthier parts of society usually utilise
the STMM and would pay less tax than someone who was to
invest their money elsewhere.

One argument raised by the NSW FID Committee is that the
STMM provisions of the FID legislation discriminate
against the retail sector and favour the wholesale
sector.(24) But as we have seen the low amount of revenue
that STMM FID creates would discount this theory to an
extent.

_The Tax Policy Elective recommends that the provisions for
STMM dealers be substantially revised. Perhaps it would
be acceptable to raise the rate of tax charged, or even
look at implementing a new system of calculating the tax.
The Victorian Report suggests that the tax should be
calculated on the average credits to a STMM dealers
account.(25)_

5.4.2 Definition of Financial Institution

FID only applies to Financial Institutions (as defined)
with dealings in excess of $5 million per annum. This may
offend vertical equity if an institution with dealings
totalling less than the threshold has only a very small
number of clients. Thus the members of an institution
with receipts greater than $5 million will pay
proportionately far more tax on their deposits.

5.4.3 Exemptions

The other exemptions to FID also seem to be inequitable.
They were introduced to maintain horizontal equity between
institutions, but as a matter of equity to their
depositors all institutions should pay the same tax.

_The Tax Policy Elective recommends that all of the
exemptions to FID that are based solely on political
reasons should be abolished. These include exemptions for
charitable organisations, some Government departments and
Social Welfare recipients. Exemptions that prevent double
dipping by the State should be maintained_

5.4.4 Limit on Each Transaction

Another inequity is raised by the $1200 upper limit set on
any transaction. Vertical equity is offended by this
provision in that the people who are able to make deposits
of over $2 million will pay the same amount of tax as
those depositing $2 million.

_As mentioned above the Tax Policy Elective recommends the
abolition of the maximum liability for any transaction._


6 DEBITS TAX

Due to the operation of the Bank Account Debits Tax
Administration Act 1982 and the Bank Account Debits Tax
1982, tax was imposed, at the Commonwealth level, on
debits made to an account in Australia since April 1,
1983. In 1990 this power was transferred to each
respective State but with the Commonwealth still
responsible for collecting the tax while the transition
took place. If a State chose not impose such a tax, the
Commonwealth would reduce its' grants to that State by an
amount equal to the tax which would have been collected(26)
hence, the imposition of this tax was effectively
compulsory if a State wished to maintain the total amount
of its revenue.

TABLE 1

Range of amounts of taxable debits
or eligible debits (Amount of tax in brackets)

Not less than $1 but less than $100 (15c)
Not less than $100 but less than $500 (35c)
Not less than $500 but less than $5 000 (75c)
Not less than $5 000 but less than $10
000 ($1.50)
$10 000 or more ($2.00)

Western Australia imposed this tax via the Debits Tax
Assessment Act 1990 (`the Act') and the Debits Tax Act
1990 (`the Debits Act') and a full transfer of the tax
from the Commonwealth to the State occurred from January 1
1991. Both of the Acts are to be read together.(27) The
Debits Act imposes the tax while the Act determines the
procedure for the collection of the tax so imposed. The
tax is calculated based on the rates in Schedule 1 of the
Debits Act (Table 1) for each withdrawal not less than $1
made from a Western Australian account. Account is
defined in s3(1) of the Act to include:

"accounts, (a) kept with banks, from which
cheques can be drawn upon (ie, commonly
referred to as cheque account), or
(b) kept with non-bank financial
institutions (NBFI), from which payment
orders can be drawn upon."

Thus the Act deals basically with cheque accounts and not
with savings accounts. For the rest of this chapter,
`accounts' will be used in line with this definition
unless otherwise specified. Also, `financial
institutions' (FI) will be used to refer to both banks and
NBFI.

In total, this tax had raised some $39. million or 3% of
the total State tax revenue for 1991-92,28 $42.5 million
or 2.8% for 1992-93 and is estimated to contribute $45
million or 2.3% for 1993-94.(29) Thus, its contribution to
the State, while small is still significant.


7 COMPARISON OF DEBIT TAX WITH THE CRITERIA FOR
'IDEAL' TAXES

7.1. Simplicity

The three criteria used for assessing an ideal tax are
simplicity, efficiency and equity. Simplicity requires
that the tax must be easy to understand, to regulate and
to comply with. As mentioned above, the calculation of
Debits tax is not a complicated process. It is a simple
tax to understand and comply with. Further, it is easy
for the State to regulate as the FIs automatically collect
it from account holders on behalf of the State. This
means the State deals with only a few collection points
and this makes the tax relatively cost efficient.

However, a question remains: How many individual customers
of FIs know what the tax rate is or that the tax is
charged on each transaction? The Tax Policy Elective
suggests that many do not. As the FIs automatically
collect the tax, the public only see the final figure and
may not realise the mechanism used in calculating the tax.
To this regard, this tax may be considered a `hidden' tax.
This question will have to be investigated by further
review bodies.

7.2. Efficiency

Efficiency requires that taxes cause as little change as
possible in the economic decisions of the taxpayer. In
this respect Debits tax is not efficient. Since the tax
is charged on each transaction and the rate decreases in
line with the sliding scale it encourages people to
aggregate withdrawals so as to minimise the impost. For
example, if a series of transaction over a month resulted
in 100 withdrawals of $100 each, with a tax liability of
$35, the party making the withdrawals may instead choose
to make 1 transaction of $10 000 and incur a liability of
just $2. This means that people may try to change their
withdrawal habits to minimise the tax they pay.

A further inefficiency is that the tax is chargeable only
on cheque accounts with banks and payment order accounts
with NBFIs. This may create a problem in today's
financial markets where there are many `quasi-
savings/cheque accounts'. These are savings account with
limited chequing facilities. If they are deemed savings
accounts, there will be no tax liability. This may
encourage a shift of capital to such accounts.

_The Tax Policy Elective recommends that the types of
transactions that are taxed under the Act be broadened.
Thus all accounts would be taxed as cheque accounts
currently are._

Furthermore, companies can choose not to debit individual
staff pay from the company accounts but may instead
withdraw the total payroll amount in one transaction and
deposit it into a savings account. From this account, the
pay may be electronically transferred into individual
staff accounts. Banks may charge little or no fees if the
staff account is in the same bank as the savings
account.(30) Depending on the size of the work-force, the
savings may be considerable.

7.3. Equity

7.3.1 Horizontal Equity

The tax is also not equitable. Horizontal equity requires
taxpayers with the same level of debits to be taxed the
same amount. However, debits from savings and cheque
accounts do not bear the same tax. This constitutes a
clear advantage for non-trading FIs and in terms of real
economic burden, the holders of cheque accounts.

Further, there are several exemptions to the tax. Apart
from debits from savings accounts, the exemptions include
debits made to an account kept with a financial
institution in the name of:

(i) the Governor- General or the Governor of any
State;
(ii) a government of any country;
(iii) a person or organisation exempted by any
Western Australia law;
(iv) a public benevolent or a religious institution;
(v) a public or non-profit hospital;
(vi) a non-profit university, school or college and
(vii) any State or the Commonwealth government
or its bodies.(31)

Non-profit organisations and statutory bodies may be in
competition with profit organisations, but not bear the
burden of the tax.(32) This is clearly inequitable. If the
exemptions are intended as a form of aid, it may be better
to give direct aid instead. Such direct funding is
subject to greater scrutiny as to the amounts and pattern
of expenditure involved.

_The Tax Policy Elective recommends that all of the
exemptions to Debits tax that are based solely on
political reasons should be abolished. These include
exemptions for charitable organisations, some Government
departments and Social Welfare recipients. Exemptions
that prevent double dipping by the State should be
maintained._

Also, in today's society, there is a greater utilisation
of EFTPOS.(33) Usually the amounts involved are small and
this may result in a higher effective percentage tax rate
being applicable depending on the pattern of withdrawal.
The pattern of withdrawal and the effects of the tax on
the public will have to be further investigated by future
review bodies.

7.3.2 Vertical Equity

The tax also breaches vertical equity. Vertical equity
requires those with different capacities to pay,to be
taxed differently. Usually, this is taken to mean that
one who has a greater capacity is to be taxed more. It is
submitted that those who possess a lower economic capacity
generally withdraw smaller amounts per withdrawal. This
means smaller debits should be taxed less. The amount of
tax, as a percentage, decreases considerably as one
withdraws a larger amount per transaction.

For a $20 withdrawal, the effective tax rate is 0.75%.
However, for a $100 withdrawal, the rate is less than half
this amount, at 0.35% and at $20,000 the rate is only
0.01%.

Generally, those in the lower social-economic groups will
be penalised as their withdrawal limit will not be large
as those in the higher social-economic groups. As such,
they will pay a greater amount of tax than those in the
higher social-economic groups.

_The Tax Policy Elective recommends that a flat rate of
Debits Tax be imposed, somewhere in the vicinity of the
FID rate. At a rate of 0.06% the revenue received under
Debits tax would increase. For large transactions over
$3333 the tax payable will be greater than the previous
maximum(34) .This will offset the loss of income a flat rate
will cause for lower withdrawals._

_In the alternative, if the previous recommendation is not
followed then we would recommend that the Debits tax be
calculated on an aggregate basis whereby the sum total of
each month's transactions are taxed. Even though this
recommendation would lead to a smaller revenue from the
tax, revenue neutrality could be maintained by raising the
rate of the tax._

8 CONCLUSION

Both FID and Debits tax offer the potential of being a
broad based tax. However, the extent of current
exemptions under both taxes and the limited applications
of Debits tax primarily to cheque accounts only compromise
this broad base. Our recommendations suggest a removal of
the exemptions and a review of the operation of both to
assess the possibility of linking or amalgamating the
taxes in the interest of greater efficiency, equity and
simplicity.

9 SUMMARY OF RECOMMENDATIONS

Our recommendations deal with either broadening the tax
base or increasing the rates dutiable. However, the
latter might be resisted in this State as one of the
primary reasons for introducing FID was to bring WA's
taxing regime into line with the other States. We would
recommend uniformity between the FID and Debit tax regimes
in all of the States.

9.1 Exemptions

The second recommendation is to scrap all of the
exemptions to both FID and Debits tax that are based
solely on political reasons. These include
exemptions for charitable organisations, some
Government departments and Social Welfare recipients.
Although this measure would be very difficult to pass
through the Parliament, we believe that due to the
relatively small increases the recommendations could
be acceptable. Exemptions that prevent double
dipping by the State should be maintained.

9.2 Linking taxes

As explained above the regressive rate of tax charged
under the Debits Tax Act offends many of the criteria
for a good tax. Thus we would recommend that a flat
rate be imposed, somewhere in the vicinity of the FID
rate. To this extent, we would also recommend that
the two tax rates be linked together so that if one
changes the other would also be altered. If this
were followed then the tax received under the Debits
Tax regime (at a rate of 0.06%) would increase. For
large transactions over $3333 the tax payable will be
greater than the previous maximum.(35) This will
offset the loss of income a flat rate will cause for
lower withdrawals.

9.3 Aggregate Tax

If the previous recommendation is not followed then
we would recommend that the Debits tax be calculated
on an aggregate basis whereby the sum total of each
month's transactions are taxed. Even though this
recommendation would lead to a smaller revenue from
the tax, revenue neutrality could be maintained by
raising the rate of the tax.

9.4 Maximum Liability per Transaction

As a matter of pure tax policy we would recommend the
abolition of the limit on the maximum Financial
Institutions Duty payable on any transaction. As
previously explained we also recommend the maximum
liability for transactions under Debits tax be
abolished.

9.5 Short Term Money Market

With regard to the FID tax we would also recommend
that the provisions for STMM dealers be substantially
revised. The fact that certified dealers have to pay
only 25 cents for every $50 000 in their trading
accounts at the end of each day would suggest that a
great deal more revenue could be generated from this
area. Perhaps it would be acceptable to raise the
rate of tax charged, or even look at implementing a
new system of calculating the tax. The Victorian
Report suggests that the tax should be calculated on
the average credits to a STMM dealers account.(36)
This would replace the current system where liability
is calculated on the balance at the end of the day
which is problematic given the practice of
transferring money to overseas accounts each day.
This recommendation would also make the provisions
more horizontally equitable in that the STMM dealer
would pay tax commensurate to duty payable on similar
transactions.(37)

9.6 Types of Transactions

For the Debits tax to be more effective we would
recommend that the types of transactions that are
taxed under the Act be broadened. Thus all accounts
would be taxed as cheque accounts currently are.


10 FURTHER RESEARCH

It is recommended that the taxes be reviewed to ascertain
among other things the costs of compliance which financial
institutions incur in collecting the taxes and the extent
to which the administration costs are passed onto the
customer. The possibility of linking the operation of the
taxes has been suggested and other ways of streamlining
the taxes on financial institutions should be examined.
Such moves may need to be considered with reference to the
practices in other jurisdictions and greater harmonisation
with these other jurisdictions should be sought.

Notes:

(1) See Wallace & Zipfinger, *Australian Stamp Duties*
Law, Vol 1A, Butterworths, Sydney, 1991, at 1198.21.
See also Financial Institutions Duty Bill, Second
Reading speech, *Western Australia Parliamentary
Debates*, Hansard, Vol 251, 1983-4, p 4833.
(2) See, s 3 definition of "exempt account".
(3) Ib id
(4) s 4(10)(d)
(5) s 3 (excluded from the definition of "financial
institution").
(6) Regulations 5(2) & 5B respectively.
(7) Regulation 5(1).
(8) See Second Reading speech, 1983-84, op cit. at p
4833.
(9) s 3, definition of "short term dealing".
(10) Short term liabilities broadly represents the
short term deposits and loans to, or borrowings by
these dealers. (Second Reading speech, 1983-84,
ibid.)
(11) According to data taken from State Taxation's
Annual Reports 1981 - 82 through to 1991 - 92
(12) Based on figures given by the then Treasurer,
Brian Burke, in the Financial Institutions Duty Bill
(1983) Second Reading speech, op cit, at p 4832.
(13) The rate applying to receipts by RFI's has
changed from 0.06% to 0.03% to 0.02% to 0.035% to
0.06% between 1983 and 1993.
(14) For the period between 1983/84 to 1991/2, on
average the variance between estimates and actual
collections of FID for each year was 4.7% compared to
a figure of 5.9% for the average of annual variances
for all state taxes.
(15) See s 77.
(16) Second Reading speech, *Western Australia
Parliamentary Debates*, p 4831 and 4834
(17) ib id p. 4831
(18) NSW Report p 266
(19) FID Act s. 3
(20) *NSW FID Committee Report 1990* pp 8,10 and 11
(21) ib id
(22) NSW Report p 267
(23) NSW Report p 267
(24) NSW FID Committee Report 1990, p 9
(25) Victorian Report, p 267.
(26) Mr Taylor, Minister for Finance and Economic
Development, Second Reading, Thursday 22 Nov 1990,
287 Hansard New Series 1990, p 7637.
(27) s3 of the Debits Tax Act 1990.
(28) Western Australian State Taxation Department,
*Annual Report* 1991-92, p 21.
(29) *Consolidated Fund Estimates* 1993-94, Budget
Paper No 2, p 9.
(30) National Australia Bank, Westpac and R & I all
charge no fees for electronic funds transfers between
2 accounts if both accounts are in the same bank.
(31) s3 of the Act under "excluded debit".
(32) D O'Bryen, Financial Taxes In Australia, 5
*Australian Tax Forum p 366.
(33) Electronic Funds Transfer at Point of Sale.
(34) Tax on a flat rate of 0.06% on $3333 is $2. Thus
any more will be greater than the previous maximum of
$2.
(35) Tax on a flat rate of 0.06% on $3333 is $2. Thus
any more will be greater than the previous maximum of
$2.
(36) Victorian Report, p 267.
(37) NSW Report p 267.