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A National Estate and Gift Duty

24.71. Criticism of the present death taxes on grounds of the complexity of separate Commonwealth and State taxes and the considerable costs in administration and compliance that result has force. A national estate and gift duty system, administered by one authority, is clearly desirable.

24.72. A national system could be achieved by the Commonwealth and the States each enacting uniform legislation which would be administered by the Commonwealth. The Commonwealth would also enact uniform legislation to apply, in addition to its legislation for the country as a whole, in the Commonwealth Territories. Under such a national system, there would be a set of rates for the whole country under the principal Commonwealth legislation, and there might be a different set of rates in each of the States and Territories. The jurisdiction of the legislation of the States and Territories would depend on the domicile of deceased persons and donors within the State or Territory and on property within the State or Territory of donors and deceased persons domiciled outside Australia.

24.73. The obstacles to the achievement of such a national system are the limited constitutional powers of the States and the difficulties of obtaining uniform legislative action by the Commonwealth and the States. If the constitutional powers of the States are extended, there will remain the difficulty of obtaining uniform action.

24.74. A satisfactory national system in present circumstances can only be achieved by a single piece of legislation enacted by the Commonwealth. State shares of the revenue raised by the Commonwealth would be distributed to the States, the shares being determined by reference to the domicile of deceased persons and donors within the State and property within the State of deceased persons and donors domiciled outside Australia. These shares need not be less than the revenue currently raised or which it may be proposed to raise by the State taxes displaced.

24.75. The Committee would not wish the Commonwealth to vacate the field of estate and gift taxation in favour of the States. It is true that if the powers of the States were extended it would be possible to have a national system which involves uniform legislation by the States, by the Commonwealth in relation to the Commonwealth Territories, but not by the Commonwealth for the country as a whole. The Committee however considers that taxes in this area have a necessary role to play in the overall Commonwealth tax structure.

24.76. In the event of the Committee's recommendations for a national scheme being adopted, it would be necessary to establish a system of transitional provisions for the orderly introduction of that scheme.

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