Fuel Tax: AIP Policy Principles
From a tax policy perspective, AIP supports a fuel tax regime for transport fuels that:
- is efficient (causes minimum distortions), equitable (fair) and simple (easily understood)
- is practical/workable and minimises compliance and administration costs for business and government
- supports clarity, consistency and stability in policy settings relevant to the transport fuels industry.
AIP also supports relief from the burden of fuel tax being provided for ābusiness inputsā to production, and has therefore supported the policy intent of the Fuel Tax Credits system.
Overall, AIP supports the principle that all fuel used for transport – including liquid fuels (mainstream transport fuels and biofuels) and gaseous fuels (LPG, LNG and CNG) – should be taxed on a comprehensive and neutral basis, to ensure the most efficient and robust fuel tax system for road transport fuels.
- AIP supports allĀ road transport fuelsĀ being brought within the fuel tax regime (as they are now) so that all fuels (equitably) need to meet compliance obligations underpinning the integrity of the fuel tax regime and also comply with relevant fuel quality and environmental performance standards.
- AIP supports energy content as an appropriate and neutral basis for taxing all road transport fuels, and so as to not distort the allocation of resources and producer or consumer choices.
- AIP supports the principle that the point at which fuel tax should be imposed should be at the highest point in the supply chain to ensure the most compliant fuel tax regime.
AIP recognises that a transition to this efficient fuel tax policy framework may be appropriate.
The 50% fuel tax concession for alternative fuels is inconsistent with AIPās fuel tax principles above, and generates both a significant tax expenditure for Government in terms of foregone revenue and added complexity to the administration of the fuel tax regime for business and government.
AIP acknowledges that the Government may consider there is a case for assistance for alternative fuels.
However, AIP believes that such government assistance:
- should be transparent (clearly defined objectives and a demonstrated net benefit)
- should be regularly reviewed to ensure the objectives of assistance are still relevant
- should allow for a sufficient transition period prior to an appropriate expiry date
- could also address any adverse consequences for existing or committed projects arising from any fuel tax changes.
Fuel Tax: AIP Submissions
Various public submissions outlining AIP policy principles, analysis and views on Fuel Taxation can be foundĀ here.
Fuel Tax: ATO Guidance
The Australian Taxation Office (ATO) provides published guidance on excise as it relates to fuel products, including:
- what excise is
- an overview of excise legislation relevant to fuel
- who administers excise, and
- when you are involved in the excise system.
SeeĀ http://law.ato.gov.au/atolaw/view.htm?Docid=SAV/FUEL/00001&PiT=99991231235958.
Fuel Tax: Current Excise Rates
For the current excise rates of conventional petroleum products (Petrol, Diesel, Jet Fuel) and alternative petroleum fuels (LPG, LNG, CNG, biodiesel, renewable diesel, fuel ethanol) seeĀ https://www.ato.gov.au/business/excise-and-excise-equivalent-goods/fuel-excise/excise-rates-for-fuel/Ā .
Excise rates on fuel and petroleum products (other than aviation fuels) are indexed twice a year in line with the consumer price index ā generally on 1 February and 1 August.
For more information on fuel excise indexation, seeĀ https://www.ato.gov.au/general/new-legislation/in-detail/indirect-taxes/excise/reintroduction-of-fuel-excise-indexation/.
For more information on the current excise on biofuels, seeĀ https://www.ato.gov.au/business/excise-and-excise-equivalent-goods/fuel-excise/biofuels/.
For more information on the current excise on gaseous fuels, seeĀ https://www.ato.gov.au/business/excise-and-excise-equivalent-goods/fuel-excise/gaseous-fuels/.
Fuel Tax: International Comparison
A comparison of international petrol and diesel taxes and prices is available hereĀ here.
Fuel Tax: Policy Developments
Some additional fuel tax reference sources include:
- The 2002 āFuel Tax Inquiryā ā seeĀ http://fueltaxinquiry.treasury.gov.au/content/welcome.asp
- excise taxation developments since the mid 1990s, see the April 2006 Research Brief (No. 15) from the Parliamentary Library, Parliament of Australia atĀ http://aphnew.aph.gov.au/binaries/library/pubs/rb/2005-06/06rb15.pdf.
- For some key major federal government announcements on fuel excise reform, see: