Fuel Excise Tax Reforms
As you may be aware the Fuel Excise Tax reforms announced by the Government on the 15th June 2004 as part of its energy white paper, Securing Australia’s Energy Future, will take effect from the 1st July 2006.
Since the cessation of fuel excise indexation in March 2001, the ‘burner rate’ for fuel oils has been 7.557cpl. This has been the rate that has applied to the fuel oils purchased in Australia. As part of the fuel tax reforms announced by the Government in 2004, this effective excise on burner fuels will be removed.
It is, however, to be replaced with an excise on fuel oils when used for internal combustion purposes. The rate applicable for heavy fuel oils will be 38.143cpl (an increase of 30.586cpl), the same as diesel oil will be from the 1st July 2006. Vessel Operators (or their local agent) who are currently eligible to claim back excise on bunkers will be able to claim a full rebate via their Business Activity Statement (BAS) process. The new business credit system will replace the existing Energy Grants Credit scheme.
- Excise on fuel oil will increase to 38.143cpl from 7.557cpl effective 1st July 2006.
- Vessel operators will be able to claim a full rebate via their Business Activity Statement (BAS) process.
IBS has written to Treasury highlighting the impact on cash flow that the increase in the fuel oil excise rate will have on our business and that of our clients. Whilst Treasury have acknowledged the impact on cash flow is real, the Government feels it is offset by the benefits they see the reforms will bring to the economy. In simple terms their will be no relief to the cash flow impost for IBS, however clients should obtain rebates quicker via the new business credit system ( part of the BAS process), than the current system.
More detailed information can be found on The Treasury website at www.treasury.gov.au
If you have any questions please do not hesitate to contact me.
Manager, Marketing and Sales