POPULAR WORDS

The Victorian government has moved to clarify legislation covering stamp duty on insurance premiums. The move is in response to a Supreme Court ruling on August 23 in favour of a claim by Royal & Sun Alliance that the gross insurance premium does not include GST. Under existing arrangements in Victoria and other states and territories, duty is payable on the gross premium, including components such as the fire services levy and, for insurance cover after July 1, 2000, GST. This practice has raised the ire of employers, who rightly claim this represents a 'tax on a tax'. In Queensland alone, it is estimated to generate another $10 million a year in revenue. State Treasurer John Brumby says the government will immediately draft legislation to confirm and clarify existing arrangements, which will ensure the entire premium remains subject to duty. The Commissioner of State Revenue will also contest the decision in the Court of Appeal. He defends the move by claiming it is "fully consistent" with other states as well as the Commonwealth's long-standing policy of levying stamp duty on prices inclusive of the wholesale sales tax, which the GST replaced. "The state government will, therefore, act to ensure that the collection of this revenue – which funds many vital services – is fully protected," he says. "Had stamp duty not been GST-inclusive in relation to a number of taxes, there would have been an overall net loss to state revenue."