Federal Budget 2014-15
As expected, from a business taxation perspective, the Treasurer has continued to reposition existing tax policies with no major surprises or changes. The more important focus for business will be the White Paper on the Reform of Australia's Tax System, which will provide a longer term considered approach to tax reform and which is due prior to the next election.
Indirect tax - fuel tax changes
Fuel excise indexation will be reintroduced from 1 August 2014. This will involve a biannual CPI indexation. Revenue raised through this measure will be linked to funding for new road infrastructure.
The burden of fuel excise indexation will fall largely on consumers and to a lesser extent on the business sector. This is as a consequence of the fuel tax credit scheme, which is available to businesses acquiring taxable fuel for eligible uses and which will remain essentially unchanged.
Some further changes were announced in the Budget to schemes relating to fuel products. These may have more implications for business and include:
An increase in grants under the Product Stewardship Act, which principally relates to recyclers of sump oil and similar products
A reduction in the net excise on ethanol and biodiesel to nil from 1 July 2015. This will involve the cessation of the Ethanol Production Grants Programme and Cleaner Fuels Grants Scheme
A gradual increase in the excise on ethanol and biodiesel from 1 July 2016. Excise on ethanol will increase by 2.5 cents per litre per year until it reaches 12.5 cents per litre. Excise on biodiesel will increase in line with product energy content rules.
No changes were announced in the Budget for other indirect taxes, including Goods and Services Tax, the Wine Equalisation Tax and other excises (e.g. tobacco).