Bank Account Debits Tax was an Australian tax levied on customer withdrawals from bank accounts with a cheque

Cheque

A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...

 facility (both withdrawals made by cheque or by another means, such as EFTPOS

EFTPOS

EFTPOS is the general term used for debit card based systems used for processing transactions through terminals at points of sale. In Australia and New Zealand it is also the brand name of the specific system used for such payments...

).

The tax was introduced by the Commonwealth in 1982. The power to levy the tax was transferred to the states in 1990, except for Norfolk Island

Norfolk Island

Norfolk Island is a small island in the Pacific Ocean located between Australia, New Zealand and New Caledonia. The island is part of the Commonwealth of Australia, but it enjoys a large degree of self-governance...

 which did not charge it. The tax was abolished by the states on dates between 1 July 2002 and 1 July 2005 as part of the package of reforms for the introduction of the Goods and Services Tax

Goods and Services Tax (Australia)

The GST is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer....

. The Financial Institutions Duty

Financial Institutions Duty

Financial Institutions Duty was a duty levied by Australian states and territories, except Queensland, on deposits to bank accounts, term deposits, and similar....

 was also abolished as part of this package.

The tax was based on the amount withdrawn, and varied by state. The final rates were per the following table.

	Tas Tasmania Tasmania is an Australian island and state. It is south of the continent, separated by Bass Strait. The state includes the island of Tasmania—the 26th largest island in the world—and the surrounding islands. The state has a population of 507,626 , of whom almost half reside in the greater Hobart...	ACT Australian Capital Territory The Australian Capital Territory, often abbreviated ACT, is the capital territory of the Commonwealth of Australia and is the smallest self-governing internal territory... , NT Northern Territory The Northern Territory is a federal territory of Australia, occupying much of the centre of the mainland continent, as well as the central northern regions... , NSW New South Wales New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales... , Qld Queensland Queensland is a state of Australia, occupying the north-eastern section of the mainland continent. It is bordered by the Northern Territory, South Australia and New South Wales to the west, south-west and south respectively. To the east, Queensland is bordered by the Coral Sea and Pacific Ocean... , SA South Australia South Australia is a state of Australia in the southern central part of the country. It covers some of the most arid parts of the continent; with a total land area of , it is the fourth largest of Australia's six states and two territories.South Australia shares borders with all of the mainland... , Vic Victoria (Australia) Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively.... , WA Western Australia Western Australia is a state of Australia, occupying the entire western third of the Australian continent. It is bounded by the Indian Ocean to the north and west, the Great Australian Bight and Indian Ocean to the south, the Northern Territory to the north-east and South Australia to the south-east...
less than $1	nil	nil
$1 to less than $100	$0.15	$0.15
$100 to less than $500	$0.35	$0.70
$500 to less than $5,000	$0.75	$1.50
$5,000 to less than $10,000	$1.50	$3.00
$10,000 or more	$2.00	$4.00

The tax was levied according to the state where the bank account was domiciled, not where the account holder lived. A total of about $1 billion per year was being collected near the end of its full operation in 2001 (according to the Australian Bankers' Association).

Since the tax applied only to cheque accounts, bank customers could choose not to have a cheque facility to avoid the tax, or could keep a separate cheque account used only when needing to write a cheque.

Bank errors

On 11 May 2005, National Australia Bank

National Australia Bank

National Australia Bank is one of the four largest financial institutions in Australia in terms of market capitalisation and customers. NAB is ranked 17th largest bank in the world measured by market capitalisation...

announced it had incorrectly collected Bank Account Debits Tax totalling approximately $10 million from 140,000 bank accounts. The bank's announcement included plans to reimburse customers for the $10 million incorrectly collected and a further $4 million in interest owed. However, since the issue may have dated back to the 31 December 1982 introduction of the tax, there were insufficient records to identify all affected customers.

Legislation

• Debits Tax Act 1982 (Commonwealth)
• Debits Tax Administration Act 1982 (Commonwealth)
• Debits Tax Act 1990 (New South Wales)
• Debits Tax Act 1990 (Queensland)
• Debits Tax Act 1990 (South Australia)
• Debits Tax Act 1990 (Tasmania)
• Debits Tax Act 1990 (Victoria)
• Debits Tax Act 1990 (Western Australia)
• Debits Tax Act 1997 (Australian Capital Terrority)
• Debits Tax Act 1990 (Northern Terrority)