Policy status:In Force
Date Effective:2006
Policy Type:Economic Instruments>Fiscal/financial incentives>Taxes, Economic Instruments>Fiscal/financial incentives>Tax relief, Economic Instruments>Fiscal/financial incentives>Grants and subsidies
Policy Target:Energy Sector>Electricity Generation>Renewable>Bioenergy, Transport>Fuel (conventional and alternative)
Agency:The Treasury
Legal References:Energy Grants (Cleaner Fuels) Scheme Act 2004 Excise Act 1901 Excise Tariff Act 1921 Customs Act 1901 Customs Tariff Act 1995 Fuel Tax Act 2006 Fuel Tax (Consequential and Transitional Provisions) Act 2006

Australia’s fuel tax reform policy was set out in the 2004 energy white paper, Securing Australia’s Energy Future. This paper built on and incorporated previous policy announcements. 

Implementation of the 2004 reforms began with the passage of the Fuel Tax Act 2006 and amendments to the excise and customs laws. Fuel tax reform commenced on 1 July 2006 when a single fuel tax credit system replaced a complex system of fuel tax concessions. Fuel tax credits were provided to offset the effective excise on certain business inputs and expanded over the period to 1 July 2012 to cover all fuels used off-road and fuels used on-road in heavy vehicles. Continuing fuel tax reform also brought previously untaxed gaseous fuels used in internal combustion engines into the fuel tax system.

This process commenced on 1 December 2011 and will be phased in over five equal steps that will finish on 1 December 2015. The final fuel tax rate applying to these fuels will incorporate a 50 per cent discount on the energy content fuel tax rates that would otherwise apply. The reforms aim to establish a fairer and more transparent fuel excise system and enable previously untaxed gaseous fuels to establish their commercial credentials in the marketplace.

Related policies:Ethanol Production Grants , Energy Grants (Cleaner Fuels) Scheme

Last modified: Mon, 10 Sep 2012 18:51:23 CEST