The Government will provide $37million over 4 years to the Australian Taxation Office for administration of the new fuel tax credits arrangements announced in the Energy White Paper on 15June 2004.
The fuel tax credits system will be progressively implemented over a six-year period commencing on 1July2006 and with final changes being implemented on 1July2012.
These new expanded arrangements will replace the current complex system of administering fuel tax concessions with a single system of fuel tax credits claimable via the BAS.
The changes will remove the burden of fuel tax for a significant number of businesses by expanding the range of activities and fuels that qualify for a credit. When fully implemented, the TaxOffice estimates that up to 1.2 million businesses may be eligible for fuel tax credits, which represents a significant increase to the claimant population of 185,000 under the existing Energy Grants Credits Scheme.
The additional funding will allow the ATO to progressively implement the expanded fuel tax credit arrangements for newly eligible businesses as well as alerting existing claimants to the changed claiming mechanism and extensions to eligibility.
Supporting Information
Why is this important?
- The fuel tax credits reform is part of the Government’s initiatives in the energy white paper Securing Australia’s Energy Future of 15June2004.
- The fuel tax credit system will commence from 1 July 2006 and replace the existing complex system of tax concessions delivered through the Energy Grants (Credits) Scheme and the excise and customs system.
- The proposed arrangements will fulfil the Government’s intention that the fuel tax regime minimises tax on business inputs, is competitively neutral, applies in a consistent and transparent way to all relevant fuel and fuel users and minimises compliance and administrative costs for business and government.
Who will benefit?
- Businesses currently benefiting from fuel tax concessions will become eligible for a fuel tax credit
- Tens of thousands of businesses will benefit from a broadening of activities and fuels eligible for fuel tax concessions.
- From 1July 2006, on-road business users of fuel will receive credits to offset excise so that they only incur a road user charge.
- By 1July2012, all users of all fuels for off-road business purposes will be entitled to a fuel tax credit.
What funding is the Government committing to the initiative?
- The Government will provide additional funding totalling $37million to the Australian Taxation Office for the administration of the fuel tax credit system, providing $14.3million in 2006-07, $16.1million in 2007-08, $5.5million in 2008-09 and $1.1million in 2009-10.
What have we done in the past?
- Grants payable under the Energy Grants (Credits) Scheme Act2003 and remissions available under the excise and customs systems will cease and be replaced with fuel tax credits claimable via the Business Activity Statement.
When will the initiative conclude?
- The new system is ongoing. The fuel tax credit system will be phased in from 1July2006 with final changes being implemented from 1July2012.