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Remote tax assistance headed for Productivity Commission review

Remote tax assistance headed for Productivity Commission review

The Productivity Commission will undertake a review into remote tax assistance after concerns were raised that it has failed to keep pace with changes in Australia.

Tax&Compliance Jotham Lian 29 November 2018
— 1 minute read

Treasurer Josh Frydenberg has requested that the Productivity Commission undertake a comprehensive review of the current remote tax assistance, including the zone tax offset, fringe benefit tax remote area concessions and remote area allowance.

The review will commence in February 2019 and the commission is due to report to government within 12 months.

According to Mr Frydenberg, concerns have been raised that the remote area tax assistance has not fundamentally changed over a number of decades to reflect changes in demography, infrastructure and cost of living.

“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,” said Mr Frydenberg.

The scope of the review will examine the operation of the zone tax offset and FBT remote area concessions, including the levels of assistance provided, indexation and the boundaries of eligible areas and prescribed zones.

It will also examine the operation of the Remote Area Allowance, which extends the benefits of the zone tax offset to income support recipients in remote zones. It will also 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.

The commission will undertake broad public consultation, including meeting directly with remote communities and inviting public submissions.

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Remote tax assistance headed for Productivity Commission review
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