By MICHAEL TRULL
The Productivity Commission, in its final report into remote area tax concessions, is recommending to either scrap or at least drastically reduce concessions such as the Zone Tax Offset as well as employer provided housing.
This has the potential to cost a large number of Territorians anywhere between $300 and $1173 per year, as well as costing employers fringe benefits tax (which they may pass on to employees).
As an example (without provide specific advice), anyone living in or within 250km of an urban area in the Northern Territory who earns over the tax free threshold, receives $338 as an annual tax offset when the prepare their income tax returns.
If this is a “special” remote area – generally 250km from an urban area in the NT but also including some major centres such as Tennant Creek – receives $1173.
Under the recommendations, these taxpayers will cease to receive these offsets (rebates).
The report also includes a recommendation that employers should no longer be able to provide employees with tax exempt accommodation.
This could, for example, apply to emergency and medical personnel permanently stationed in remote communities.
A full copy of the report can be found on the web.
[The author is an accountant in Alice Springs.]
UPDATE February 27, 3.30pm
The Minerals Council of Australia welcomes the news the Morrison Government will not be acting on the recommendations, says the council’s CEO, Tania Constable.
“The government’s decision highlights a thorough understanding of regional communities and a commitment to making Australia the global investment destination of choice for mining,” she says.
“There are clear operational reasons why mining companies provide this accommodation – to attract a workforce. It is a necessary and unavoidable cost of doing business in remote locations.
“The imposition of FBT on the cost of providing that accommodation would have been an additional tax on remote area businesses and would have increased the cost of employment of the workforce.”
By MICHAEL TRULL