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  • Fuel tax credits gap 2016–17

    This information is for historical purposes only.

    The fuel tax credits gap is the difference between the estimated value of fuel tax credits business are entitled to claim according to the law and the value of fuel tax credits actually claimed by businesses for a financial year.

    Fuel tax credits provide businesses with a credit for the excise or customs duty included in the price of fuel they use in the ordinary course of operating their business.

    The intention is to remove or reduce the cost of fuel tax on taxable fuels used in business operations.

    Differing rates of credits apply depending on the type and use of the fuel. To make a claim, a taxpayer must be carrying on a business and be registered for GST at the time they acquire, manufacture or import taxable fuel.

    Challenges for taxpayers exist due to complexities resulting from the frequency of rate changes and the complication arising from the need to apportion fuel use for different business activities and types of vehicles. Further challenges to the system may arise regarding uses of fuel being on public roads or off public roads, which affects the rate at which claims can be made.

    The fuel tax credit gap arises from taxpayers not claiming their correct credits. However, as the fuel tax credits system is voluntary, there is potential for over-compliance by taxpayers. That is, eligible taxpayers might under-claim or not make a claim which results in a negative gap.

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      Last modified: 10 Jan 2020QC 61077