Fuel Tax Indexation Changes

The Government’s decision to reintroduce fuel tax indexation will not affect the net fuel price paid by  trucking operators, the Chief Executive of the Australian Trucking Association, Stuart St Clair, said following last week’s budget. Therefore, it the changes are unlikely to impact freight costs or grocery prices.

On Budget night, the Government announced that the fuel tax rate will increase twice a year in line with inflation, starting August 1 2014. The fuel tax rate has been frozen at 38.144 cents per litre since 2001.

The main reason the net fuel price paid by trucking operators would not increase is because of the fuel tax credits system.

“Under the fuel tax credits system, businesses can claim fuel tax credits for each litre of fuel they buy for use in trucks that meet one of four environmental criteria,” Mr St Clair said.

“Businesses can claim for the full amount of tax they paid on the fuel when they bought it, minus the road user charge, currently 26.14 cents per litre. As a result, the twice-yearly indexation of the fuel tax rate will result in matching increases in the fuel tax credits operators can claim.”

Mr St Clair welcomed the Government’s decision not to change the fuel tax credits system.

“The ATA pressed the Government to keep the fuel tax credits system as it is, despite suggestions that it could take a haircut,” he said.

“The Government’s decision is a win for the trucking industry. The fuel tax credits system helps reduce the cost of transporting freight and keeps our exporters competitive.”

To read the full article visit the Australian Trucking Association website.