Provisional Collection of Taxes Act, 1931

The Provisional Collection of Taxes Act, 1931 is the legal basis for a practice familiar from every national budget announcement: certain new or changed customs, excise, or sales tax rates take effect immediately when the relevant Finance Bill is introduced in Parliament, rather than waiting for the Bill to be fully debated and passed into law. Section 3 lets the Federal Government insert a "declaration" into such a Bill stating that it is in the public interest for a particular provision — one imposing, increasing, or reducing a customs, excise, or sales tax duty — to take immediate effect under this Act.

Section 4 spells out how long that immediate effect lasts. A "declared provision" has the force of law from the moment the Bill is introduced, and it stays in force until one of three things happens: it is formally enacted (with or without changes), the government withdraws it following a vote in Parliament, or sixty days pass from the Bill's introduction without either of those happening.

Section 5 handles the reconciliation that follows. If the provision is eventually enacted in an amended form, or if it lapses under Section 4, the government must true up what was actually collected against what should have been collected under the final rule — issuing refunds where too much was collected, or raising fresh demands where too little was collected — though any refund or demand is capped at the difference between the originally declared rate and the rate that was in force before the Bill was introduced.

This is a technical fiscal-procedure law of ongoing practical importance: it explains why announced tax and duty changes in a Finance Bill can bind taxpayers immediately, before the Bill has actually become an Act.