AGY-3988 | Land and Income Tax Office (1895-1900) / Department of Taxation (1900-1946)

Full description

The Land and Income Tax Assessment Act of 1895 received assent on 12 December 1895. The Act established a system of direct taxation by means of a tax on land and a tax on income. It provided for the appointment of officers for the levying, assessment, and collection of such taxes and provided for appeals from assessments. (1) The Act appointed three Commissioners of Taxation on whom were devolved all the powers, functions and duties of the Act.

The then Collector of Customs and Commissioner of Stamp Duties were appointed First and Third Commissioners and a Second Commissioner was to be appointed (2). The Land and Income Tax Office administered the 1895 Act. In 1900 the agency became known as the Department of Taxation. The First Commissioner of Taxation headed the Department. (3). By August 1901 no permanent staff had been appointed to the Department despite it having existed for about five and a half years (4). On 4 October 1901 permanent staff were appointed to the Department of Taxation (5).

The Constitution of the Commonwealth included the power of the Commonwealth Parliament to make laws regarding taxation. It also provided for the transfer of State public servants to the control of the Executive Government of the Commonwealth (6).

Under the Income Tax (Commonwealth) Collection Act of 1923 the Commonwealth and State of New South Wales entered an agreement regarding the assessment and collection of income tax for both the Commonwealth and the State. To avoid duplication between the Commonwealth and the State officers of the Commonwealth Public Service were transferred to the State Public Service from 1 July 1923 for a period of at least five years (7).

By 1930 the Department had an Examining and Intelligence Branch. The passing of the Unemployment Relief (Tax) Act 1930 led to the appointment of additional staff in those branches (8). By 1932 there was also an Assessing Branch and an Intelligence Branch (9). A general re-organisation of the department took place in 1933-1934, with the Assessing Branch being divided according to the types of return assessed (10).

By 1934 the Department of Taxation consisted of the following branches: Administrative Branch, First Clerk’s Branch, Intelligence Branch, Overseas Branch, Refund Branch, Amendments Branch, Accounts Branch, Correspondence Branch, Arrears Branch, Inquiry Branch, Internal Check, Assessing Branch, Examiners’ Branch, Inspection Branch, Issue Branch and Records Branch. The Assessing Branch formed the largest part of the Department (11).
By 1936 the size of the Department had increased due to: the operation of the Prevention and Relief of Unemployment Act 1930 as amended (later the Special Income and Wages Tax (Management) Act); the requirements under the Amending Federal Income Tax Act for all overseas travellers to secure clearance certificates; the increased inspectorial and examination activities to ensure that payment of tax was not avoided; and, the very substantial increase in the volume of work due to the Department’s policy in connection with requests for extension of time in which to pay tax (12).

In 1936 the Department gave effect to the provisions of the Income Tax (Management) Act 1936. Two Assistant Commissioners were appointed. It was anticipated that re-organisation of the Department and the installation of modern accounting machines would lead to a reduction in the size of the Accounts Branch (13). The Branches of the Department in 1938 remained the same as in 1934 with the addition of the Prosecutions Branch and the Income Tax Recovery Branch, Crown Solicitor’s Office. New company legislation also impacted upon the work of the Department (14).

Under the Commonwealth Taxation Collection Act 1941 the State of New South Wales was able to make arrangements for the collection by the Commissioner of Taxation of the State of the whole or part of any Commonwealth taxation payble in the State under Commonwealth law (15). The Income Tax Management Act 1941, in force from 1 November 1942, provided for the assessment and collection of a tax on incomes (16).

The State Collection Act 1942 commenced on 1 September 1942 and provided for the collection of any tax imposed by the State by the Commonwealth on behalf of the State. It also provided for the transfer on loan to the Commonwealth of any officer of the State (17). In 1942-43 the Uniform Tax Scheme was introduced. Prior to this New South Wales had levied State income tax, super tax and further tax on undistributed income of companies. When the Uniform Tax Scheme was introduced these taxes were discontinued and the Commonwealth Income Tax rates were increased to raise the revenue previously raised by these taxes (18).

Officers of the State Department of Taxation were transferred to the Commonwealth Taxation Department. By December 1946 only twenty-one clerical and general officers remained in the abolished department (19).

Endnotes
(1) Land and Income Tax Assessment Act of 1895 (59 Vic. No. 15, 1895).
(2) Ibid., sections 2 and 3.
(3) Public Service List 1900, pp. 24-25 as Land and Income Tax Office; Supplement to the New South Wales Government Gazette, Friday 23 February 1900, p. 1580 as Taxation Department; Public Service List 1902, pp. 32-35 as Department of Taxation.
(4) Votes and Proceedings of the Legislative Assembly, 6 August 1901, p. 39.
(5) Supplement to the Government Gazete of the State of New South Wales, Friday, 4 October, 1901, p. 7712.
(6) Constitution of the Commonwealth of Australia, sections 51 and 84.
(7) Income Tax (Commonwealth) Collection Act, 1923 (No. 16, 1923); Twenty-Seventh Annual Report of the Public Service Board for the year ended 30th June, 1923, p. 9.
(8) Thirty-fourth Annual Report of the Public Service Board for the year ended 30th June, 1930, p. 7.
(9) Thirty-sixth Annual Report of the Public Service Board for the year ended 30th June 1932, p. 3.
(10) Thirty-eighth Annual Report of the Public Service Board for the year ended 30th June 1934, p. 9.
(11) Public Service List 1934, pp. 23-28.
(12) Fortieth Annual Report of the Public Service Board for the year ended 30th June, 1936, pp. 20-21.
(13) Forty-Second Annual Report of the Public Service Board fo the year ended 30th June 1938, pp. 27-28.
(14) Public Service List 1938, pp. 26-32.
(15) Commonwealth Taxation Collection Act 1941 (No. 14, 1941), section 3 (1).
(16) Income Tax Managemetn Act 1941 (No. 48, 1941).
(17) State TaxationCollection Act 1942 (No. 21, 1942), section 2.
(18) Official Year Book of the Commonwealth of Australia No. 39-1953. Canberra: Commonwealth Bureau of Census and Statistics, 1952, pp. 803, 807.
(19) Public Service List 1946, p. 27; Government Gazette, Friday, 2 August 1946, p. 1787 shows the last gazetted appointment to the Department in 1946.