14 December 2018

Reforming the petroleum resource rent tax


The Morrison Government is delivering on its commitment to ensure the Petroleum Resource Rent Tax (PRRT) better reflects Australia's petroleum industry with the release of exposure draft legislation.

The draft legislation gives effect to key changes to the PRRT which we announced last month in response to the Callaghan Review.

The draft legislation will lower uplift rates for general expenditure and exploration expenditure with application from 1 July 2019. This will limit the scope for excessive compounding of deductions.

Also, the exposure draft removes onshore projects from the PRRT regime from 1 July 2019. This change will simplify and strengthen the integrity of the PRRT. Since onshore projects were brought into the PRRT in 2012, no revenue has been collected and that is expected to remain unchanged into the future.

The new uplift rates and removal of onshore projects are expected to raise $6 billion over the next decade, to 2028-29.

The exposure draft legislation and explanatory materials are available on the Treasury website, with submissions due submission by 15 January 2019.

Separate legislation to give effect to the changes that improve PRRT efficiency and administration will be introduced by Government.

These reforms are part of the Coalition Government's plan for a stronger economy, to guarantee the essential services that Australians rely on.