AUSTRAC has invited stakeholders to make submissions on the proposed arrangements for the 2015-16 industry contribution levy.
As part of the 2014 Federal Budget, the Australian Government announced it would replace the cost recovery arrangements administered by the Australian Transaction Reports and Analysis Centre (AUSTRAC) (the supervisory levy) with an industry contribution levy to fund AUSTRAC’s regulatory and financial intelligence functions. The industry contribution levy became effective from the 2014-15 reporting period and leviable entities were invoiced during April 2015.
What is the industry contribution levy?
The industry contribution is calculated as a percentage of AUSTRAC’s operating costs, including amortisation and depreciation costs of assets used by AUSTRAC. For the 2015-16 reporting period, 90% of AUSTRAC’s operating costs will be payable from the industry contribution levy. This is an increase from 70% payable in the 2014-15 reporting period.
The amount payable by reporting entities is a calculation of a reporting entity’s annual earnings (“earnings component”) and reporting activity (“reporting component”) as at the census date. Both components, and the total amount payable, are subject to thresholds (see below).
A key benefit of the industry contribution levy is to reduce the regulatory burden on small businesses. AUSTRAC estimates only 5% of reporting entities will trigger the threshold requirements to contributing to the levy.
This month, AUSTRAC has made available its Industry Contribution Stakeholder Consultation Paper for public comment. The paper outlines AUSTRAC’s proposed changes to the calculation factors which were used to determine the amount of the 2014-15 levy.
Broadly, AUSTRAC does not propose to make any changes to the underlying structure of the charging model that was used from the 2015-16 reporting period, however some changes will be made to the calculation factors in order to reflect the increase to the percentage of AUSTRAC’s operating costs that will be covered by the levy.
What this means for reporting entities
The census date for the 2015-16 reporting period is 14 September 2015. AUSTRAC expects to issue invoices in October 2015. Reporting entities should ensure their details on the online business profile are up to date as this will determine whether or not an entity is a leviable entity and receives an invoice.
Comments on the consultation paper are due by 26 August 2015.