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The earliest taxes imposed in Victoria were customs duties which were placed upon a range of imported and exported goods and were administered by the Department of Trade and Customs (VA 606) from 1851. Of all colonial taxes, import and export duties were by far the most significant, accounting for approximately one quarter of the Colony's revenue, however jurisdiction for all customs duties was transferred to the Commonwealth upon federation in 1901 - see customs.
Throughout the second half of the nineteenth century the government introduced a number of taxes and duties administered by various offices within the colonial government. The most notable of these were duties on estates of deceased persons, land tax and duties on the production of tobacco and beer.
Duties on the estates of deceased persons (probate duties) were introduced under the Duties on the Estates of Deceased Persons Act 1870 (34 Vic., No.388). Payment of probate duties was initially made to the Master-in-Equity, Supreme Court.
An early form of land tax was introduced under the Land Tax Act 1877. This tax was administered by the Chief Secretary's Department to 1884 and then by the Department of Crown Lands and Survey.
Income tax was introduced into Victoria in 1895 under the Income Tax Act 1895 (No.1374). This Act imposed a tax on all income derived by any person either by personal exertion or from the produce of property. It also introduced a tax on the revenue of companies. In order to administer this tax an Income Tax Office was established within the Treasury.
Circa 1903 responsibility for the administration of land tax transferred to the Treasurer expanding the ambit of the Taxation Office. Circa 1911 the Taxation Office within Treasury assumed responsibility for probate duties.
Although the Commonwealth introduced a separate income tax prior to the Second World War, the states remained the major collectors of income tax until the 1940's. However due to the increased financial demands placed upon it during the Second World War the Commonwealth Government passed legislation in 1942 effectively removing from the states the right to collect income tax and establishing a uniform national tax system. To compensate the states for the loss of their income tax revenue a system of annual grants from the Commonwealth to the states was introduced. Initially these arrangements were to cease at the end of the war, but they were later extended indefinitely, the basis upon which grants were made changing from one of compensation for loss of previous tax revenue to one of states' needs.
In 1942 the State Taxation Office dealt with the assessment and collection of State Income Tax, Federal Income Tax, Special Income Tax, Unemployment Relief Tax, State Land Tax, Probate Duty and Entertainments Tax. By late 1943 the State Taxation Office only handled the collection and assessment of State Land Tax and Probate Duty. At this time the Office undertook the recording of all sales of properties and changes of ownership as well as particulars of ownership and values of most of the properties in the State. Nine departmental valuers were employed in checking and revising values not only for Land Tax but also for Stamp Duty and Probate Duty purposes and for other Government Departments.
Throughout the 1950's and 1960's the Victorian Government introduced a number of indirect taxes to compensate for the loss of its income tax revenue. The state continued to administer probate duties, land tax, taxes on the issue of a range of licences, motor vehicle registrations and on betting through the TAB and bookmakers' takings, amongst others.
From 29 December 1962 entertainments tax was levied in Victoria only on admissions to horse racing and trotting meetings.
A division of the Department of the Treasurer continued to oversee the administration of these taxes and from the early 1970's onwards became known as the State Taxation Office or State Tax Office. On 1 September 1971 the right to impose payroll tax was transferred from the Commonwealth to the states and in Victoria the Payroll Tax Act 1971 (No.8154) established a system for administering the tax. Since that time payroll tax has been the State's most important source of tax revenue.
As from 1 January 1972 the Gift Duty Act 1971 (No.8176) imposed duty on gifts (including gifts and settlements of property) formerly imposed only under the Stamps Acts. The Gift Duty (Amendment) Act 1981 (No.9626) effectively removed gift duty from gifts made on or after 1 January 1983. Gift and death duties were also imposed by the Commonwealth Government until 1979.
In the 1980's the Commonwealth Government alone exercises the right to impose customs and excise duties, sales tax and personal and company income tax. The ambit of taxation now left to the states comprises motor taxation, stamp duties, liquor, land, lottery, racing, payroll and entertainment taxes. The collection of gift duties is shared between the Commonwealth and the states as are probate duties. The latter were abolished in Victoria on 1 January 1984. Since that time the State Tax Office has collected duties on a decreasing number of estates relating to deaths prior to 1984.
The State Revenue Office was established under Administrative Arrangements Order No.106 effective from 28 April 1992. The Order effectively merged the Stamp Duties Office and State Taxation Office which were operating independently within the Department of the Treasury. The Order also created the position of Commissioner of State Revenue to replace the positions of Commissioner of Taxation, Comptroller of Stamps, Commissioner of Pay-roll Tax, Commissioner of Land Tax, Commissioner of Probate Duties and Commissioner of Business Franchises.