Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p13
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 13/91)
Character Range: 41966–44915

government departments' activities are funded, and the mechanisms by which parliament and the government ensure that the government departments' use of public funds is appropriate and consistent with government priorities as sanctioned by parliament, can change over time.  Accordingly, the extent to which amounts appropriated for a government department's use are recognised as income of a particular reporting period is determined by reference to the characteristics of the appropriation process and the circumstances in which the government department recognises appropriated amounts.
B27                For example, the parliamentary appropriation process currently adopted in some jurisdictions in Australia is such that the government departments do not gain control of funds appropriated for their use until obligations are incurred or expenditures are made by the government department.  In these jurisdictions, appropriations recognised as income are in the nature of a recovery of costs incurred for the acquisition of goods and services or for amounts otherwise expended.

Non-contractual income arising from statutory requirements
B28                Taxes, rates and fines do not give rise to a contract liability or revenue recognised in accordance with AASB 15, even when they are raised in respect of specific goods or services.  This is because the entity does not promise to provide goods or services in an agreement that creates obligations enforceable against the entity by legal or equivalent means.
B29                Taxes, rates and fines are not contributions by owners acting in their capacity as owners.

Payable tax credits and other tax relief
B30                Amounts of tax relief that enter directly into the calculation of a taxpayer's tax liability (including tax allowances, exemptions and deductions, and 'non-payable tax credits') are treated as reductions in income (ie foregone income), rather than expenses.  A 'non-payable tax credit' is a tax credit limited to the amount of the taxpayer's tax liability for the period.  An example of tax relief that enters directly into the calculation of a taxpayer's tax liability is where taxpayers are permitted tax deductions for self-education expenses.  These types of concessions are available only to taxpayers.  If an entity (including a natural person) does not pay tax, it cannot access the concession.
B31                In contrast, a payable tax credit is a tax credit that is not limited to the amount of the taxpayer's tax liability for the period; that is, any excess of the tax credit over the tax liability for the period would be payable to the taxpayer.  Such tax credits might be payable to taxpayers as part of a programme in which the same amount of benefit is paid to taxpayers and non-taxpayers alike (the latter being payable exclusively in the form of a cash benefit).  For example, a government may use the tax system as a convenient method