The Productivity Commission has been requested by the Government to undertake a review into remote tax assistance to ensure it remains fair and contemporary.

The review is to:

  • examine the operation of the zone tax offset and Fringe Benefit Tax (FBT) remote area concessions, including the levels of assistance provided, indexation and the boundaries of eligible areas and prescribed zones;
  • examine the economic and employment impacts of the zone tax offset, FBT remote area concessions, and Remote Area Allowance, including the effect of applying indexation, in regional Australia;
  • examine the operation of the Remote Area Allowance, which extends the benefits of the zone tax offset to income support recipients in remote zones;
  • consider whether the zone tax offset, FBT remote area concessions, and the Remote Area Allowance are delivering on their policy objectives and whether those objectives remain appropriate in a contemporary Australia;
  • consider if businesses in remote areas should be provided with similar support; and
  • consider if there are alternative mechanisms to better provide this support to Australians residing in specified geographic areas.

The review is in response to concerns raised that the current remote tax assistance has failed to keep pace with a changing Australia.

The Zone Tax Offset, Fringe Benefit Tax remote area concessions and Remote Area Allowance provide financial support to people living in remote areas of Australia. The locations eligible for these forms of assistance are determined by geographic ‘zones’, defined in tax legislation, which have remained largely unchanged since they were established in 1945.

The review will commence in February 2019 and the Commission is due to report to Government within 12 months. The Commission is expected to undertake public consultation, including meeting directly with remote communities and inviting public submissions.

 

(Source: Media release by the Treasurer)

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