Remote Area Tax Concessions and Payments

Final recommendations released

Remote Area Tax Concessions and Payments

The final study report by the Productivity Commission was released on 26 February 2020.

The final report looks at the effects of the zone tax offset, remote area allowance and remote area concessions for fringe benefits tax on people and businesses in remote areas. It makes recommendations on whether these remote area tax concessions and payments should continue and, if so, in what form.

From a Tasmanian perspective, an initial interpretation is that the recommendations would:

  • Abolish Zone Tax Offsets to Zone B areas effecting the west coast. This tax offset for taxpayers represents the loss of about $133 per year (average). A fixed rate payment would be retained for King and Flinders Island.
  • Retain the remote area allowance, a supplementary payment for income support recipients (such as age and disability support pensioners and recipients of Newstart allowance and parenting payment) to King and Flinders Island.
  • Simplify and cut back Fringe Benefit Tax concessions for employee housing, and for other goods and services, and revise boundaries for FBT remote area concessions.  It is difficult to gauge the local impacts of these proposed changes, but interesting to note that the highest concentration of employer provided housing is in Greater Hobart.

Download the full report and read submissions here.