No.044
Friday 27th May 2005
RELEASE OF INDUSTRY DISCUSSION PAPER ON DESIGN OF FUEL TAX CREDIT LEGISLATION
The Minister for Revenue and Assistant Treasurer today announced the release
of a discussion paper on the proposed legislative arrangements for the new fuel
tax credit system. This system is the next step in the Government's major
programme of reform to modernise and simplify the fuel taxation system, as announced
on 15 June 2004, in Securing Australia's Energy Future.
Under the reforms to fuel taxation the current system of fuel grants, rebates
and remissions, including the Energy Grants (Credits) Scheme, will be replaced
from 1 July 2006 with a single fuel tax credit claimable via the Business Activity
Statement. The fuel tax credit system will lower compliance costs, reduce tax
on business and remove the burden of fuel tax from thousands of individual businesses
and households.
When the fuel tax credit reforms are fully implemented the burden of fuel
tax will be removed entirely from businesses using fuel in off-road applications.
The extension of fuel tax credits for off-road use will be phased in, with a
50 per cent credit applying to newly eligible activities from 1 July 2008 and
a full credit from 1 July 2012. Alternative fuels used in off-road business
activities will be eligible for a full credit from 1 July 2011, when fuel tax
is first effectively levied on these fuels.
The reforms will also provide a partial fuel tax credit for all fuels, including
petrol, used on-road in heavy vehicles from 1 July 2006. The partial credit
will be equal to the amount of effective fuel tax embedded in the purchase price
of the fuel less a road user charge.
Grants for the use of alternative fuels on-road will continue to apply under
the Energy Grants (Credits) Scheme Act 2003 until 1 July 2010. Beginning
on 1 July 2006 and ending on 1 July 2010, the grants rate will be progressively
reduced to zero.
This discussion paper provides industry and the community with the opportunity
to express their views on the proposed design of the fuel tax credit legislation.
Interested parties are invited to make written submissions on the proposed legislation
by close of business 27 June 2005. The discussion paper is available at
www.treasury.gov.au.
Submissions may be emailed to
fueltax@treasury.gov.au
or sent to:
The Manager, Fuel Grants and GST Entities Unit
Indirect Tax Division
The Treasury
Langton Crescent
PARKES ACT 2600
Media contact: Carlie Hogan - (02) 6277 7360