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Spectrum licence taxes

The ACMA collects taxes from relevant spectrum licences each year. This covers the costs of spectrum management and the Electromagnetic Energy Program (EME Program).

Background

In September 2020, the ACMA introduced the EME component of the SLT to comply with the Australian Communications and Media Authority (Modifications to Apparatus and Spectrum Licences Taxes) Direction 2020

How we calculate spectrum licence tax is outlined in the Radiocommunications (Spectrum Licence Tax) Determination 2014 (SLT Determination). It is summarised below.

Main component

All spectrum licences incur the 'main component' of the SLT. Spectrum licences contribute to the costs of spectrum management in a similar way to apparatus licences.

The main component is calculated with a formula that takes into account the bandwidth (in MHz) and the population covered by each licence. The formula is set out in Part 2 of the SLT Determination.

EME component

The EME component recovers the cost of the EME Program. It provides information and research into the impacts of EME on human health. The EME component will collect $2.6m a year over the financial years 2020–21 to 2022–23, and $1.9m a year (indexed for inflation) from 2023–24 onwards.

All designated spectrum licences (as defined by the SLT Determination), must pay the EME component of the SLT. Exceptions include:  

  • licences used for rail safety or television outside broadcast services
  • those held by Commonwealth departments and agencies.

This means taxes for the following spectrum licences do not include the EME component:

  • licences in the 1800 MHz band with a condition they are only used for rail safety, rail operations or rail control
  • those in the mid-band gap of the 2.5 GHz band (2570 to 2620 MHz frequency range)
  • those held by Defence in the 20 GHz and 30 GHz bands.

The EME component is calculated using the following formula:

(main SLT for a designated spectrum licence) / (total of main SLT for all designated spectrum licences) × EME Program costs

Table 1 shows a simplified example of the proposed calculation. For example, Licence 1 is a designated spectrum licence, and the main SLT for Licence 1 is $120,000. The total of main components of SLT for all designated spectrum licences is $370,000.

For Licence 1, the percentage of the main SLT relative to the total is approximately 32.4%. In 2020–21, the total of EME Program costs to be recovered is $2.6 million. Therefore, the EME component of the SLT for Licence 1 is $843,243. The total SLT relating to Licence 1 will be $963,243.

Table 1: Simplified example calculation for the EME component of SLT for 2020–21

Spectrum Licences

Main SLT*

EME component as % of total main SLT**

EME component of SLT ($)***

Total SLT payable ($)

Designated Spectrum Licence 1

$120,000

32.4

$843,243.00

$963,243.00

Designated Spectrum Licence 2

$200,000

54.1

$1,405,405.00

$1,605,405.00

Designated Spectrum Licence 3

$50,000

13.5

$351,351.00

$401,351.00

Total of the Main SLT payable

$370,000

 

 

 

Spectrum Licence 4

$49,000

Not applicable

Not applicable

$49,000.00

Total

$419,000

 

$2,599,999.00

$3,018,999.00

* The main SLT is calculated by the current methodology for determining SLT in the existing SLT Determination.

** The EME component of SLT is based on the target total EME component of $2.6 million apportioned by the percentages. The percentages are rounded to one decimal place for ease of viewing (the amending determination of the associated formula does not require rounding of the percentages). Licences such as Spectrum Licence 4 that are not designated spectrum licences are excluded from the EME component calculation.

*** The EME component for each licence will be rounded down to the nearest dollar to ensure that the ACMA does not collect in excess of the total EME component.

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