Welcome
No conflicts of interest were declared. Attendees were reminded to declare any conflicts that may arise during discussions.
Integrity declarations have been completed by all non-government attendees. Attendees were asked to highlight any issues considered sensitive or confidential during discussions.
2025–26 reflections – compliance focus areas for 2026–27
The latest tax gap estimate for fuel tax credits (FTC) was published in October 2025 and is 3.7% or $345 million, which includes under and overclaims. This indicates a very high level of compliance which measures the correctness of claims being lodged.
Claims are aligned to fuel consumption trends across sectors, however it was noted that the business activity statement (BAS) label for FTC claims is not broken down by industry or type of fuel use. Trends are closely aligned to diesel collections noting a shift from the use of gasoline and petrol to diesel usage, even in the light vehicle market.
Overclaims may relate to:
- incorrect apportionment methodologies
- application of the wrong rate
- incorrect calculations which may be impacted by rate changes
- technology-based calculations
- inaccurate record keeping.
FTC claims are not generally supported by most business’ natural record keeping systems – it was noted that some systems will calculate the FTC once fuel apportionment has been undertaken. Other issues can relate to incorrect allocation of fuel used on road versus offroad, as well as overclaims caused by fraudulent BAS activity.
Underclaims may relate to:
- clients not understanding their full entitlement
- not being aware of rate changes
- record keeping limitations
- the perception that claiming is too difficult and not worth the time invested.
From a total of $9.8 billion of FTCs claimed in 2024–25, an approximate breakdown across industry is:
- $4.5 billion for the mining industry
- $1.8 billion for transport, postal and warehousing
- $1.1 billion for agriculture, forestry and fishing
- $694 million for construction and manufacturing
- $344 million split across other industries.
In terms of population, the bulk of claims are received from transport, postal and warehousing. We consider population when ascertaining where to provide education support and assistance to help clients claim the right amount.
There have been changes in the industry around the shift to electrification and alternative biofuels and we are keen to hear from industry about impacts of shifts in energy mixes.
The fuel excise rate had reduced from 1 April 2026 for fuel acquired from then through to 30 June 2026 which saw a 60% reduction in the amount of FTC claimed other than for fuel used by heavy vehicles on public roads. The reduction was extended at a lower rate from 1 July 2026 to 2 August 2026.
We provided messaging during that time to ensure that claimants were aware of the correct rates for each period. The number of rate reductions and media misinformation around the actual rate reduction were areas of concern in relation to clients claiming the correct rate.
We will monitor claims during the reduction period and after 3 August 2026 to ensure that claims are adjusted appropriately. The ATO website and FTC calculator set out the correct rates for each period.
There are approximately 182,000 claimants, with 80% claiming less than $10,000 per year. The risk treatments for 2026–27 will include:
- updated web content
- outbound contact with external stakeholders
- the FTC calculator
- a compliance program which will target larger claims.
Treatment would also focus on the impact of rate reductions. Issues identified in 2025–26 related to incorrect apportionment, for example:
- use of an incorrect rate
- not considering how fuel was used
- the particular activity undertaken
- apportionment of heavy vehicles and apportionment between on and off road.
Other issues included:
- use of outdated percentages or applying the same percentage over a period of time without review to consider how the business may have changed
- failing to reassess assumptions over time when business may have changed in relation to fleet operation
- how the fuel was acquired
- use of an unsubstantiated consumption rate
- not comparing claims back to the actual amount of fuel used as a reality check.
Members raised the impact of industry crossover and shared contracting arrangements, particularly in relation to the use of heavy vehicles in non-road freight industries competing against traditional road freight enterprises.
In addition to targeted audits and reviews, we monitored data to identify trends in claims across industry to identify under and overclaims. We also note the value of intelligence where there may instances of incorrect or inappropriate claiming to ensure a level playing field.
Early engagement with the ATO for GPS and telematics-based systems continued to provide assurance for claimants on apportionment used. Use of these systems often provided improved accuracy, reduced effort and better record keeping, noting there is still some way to go for appropriate levels of governance and assurance on technological support.
We were keen for industry to work with us regarding potential systems to provide a level of assurance. A focus area for 2026–27 will be to better understand and test some of the alternative systems in use. There is currently one product ruling finalised and 2 in progress; and 4 class rulings in progress relating to apportionment methodologies. Some vehicle manufacturers were also now including relevant technology at the original equipment manufacturing stage.
Another focus for 2026–27 relates to potential BAS-related fraud with compliance activities, relating to pre-issue BAS reviews and the potential use of artificial intelligence (AI) to provide fraudulent work records to support a claim or create fraudulent invoices. Members discussed the potential use of AI, including increased risk of incorrect advice depending on the sophistication of the queries posed.
We will consider whether messaging around case studies of compliance work would assist Fuel Schemes Stakeholder (FSSG) messaging and welcome member feedback out of session.
Technical advice
An update on outstanding action items was provided. Meeting papers provided advice about Action Item 21082025-6-1 in relation to PCG 2016/11.
This item was now considered closed, noting that the ATO had taken a conservative approach in relation to the type of specialised equipment but would be open to discussion for consideration of others if a value case was made (that is, the benefit weighed against resources required and risk).
Action Item 21082025-3-1 has not progressed yet due to other priorities however we are planning to consult with FSSG members prior to the end of 2026 to consider which FTC public advice and guidance (PAG) products should be updated or amended.
Members noted the FTC rate changes in February, April, July and expected on 3 August 2026. An added challenge for the 1 April 2026 to 30 June 2026 rate change related to the additional reduction by states on goods and services tax collections which increased the reduction to 60.9% rather than 50%. We provided extra messaging to clarify the correct rate.
During that period, the road user charge (RUC) had been reduced to zero so that the off and on road FTC rate was the same. The second reduction was 30.4% and 16.4 cents per litre for the RUC. Indexation will take place with effect from 3 August 2026, based on the publication of the consumer price index by the Australian Bureau of Statistics on 29 July 2026. The new rates will be published on ato.gov.au that afternoon. Members and claimants are encouraged to refer to ato.gov.au and FTC calculator for correct rates.
We encourage members to engage with us, particularly if there are any issues considered complex, contentious or novel. Enquiries can be addressed in the first instance to excise.experience@ato.gov.au
While we had been working on a one-to-one approach for FTC support from 2021 following the issue of Taxpayer Alert 2021/3-Fuel tax credit overclaims arising from aggressive marketing and use of GPS telematics technology products, a future focus will be on a one-to-many approach. That approach will be discussed further with members as part of the review into FTC PAG products.
Members noted the impact of the number of rate changes in 2026 and the need for checks by claimants, including of bulk storage to ascertain fuel purchased after that date. A suggestion was made that rather than the actual excise rate on the day of acquisition, claims would be easier to calculate if fuel companies set out the excise rate charged for fuel on commercial fuel invoices. It was noted that this would require a law change to take effect.
Member roundtable
Treasury advised that the Transport and Road User Charging Unit in the Individuals and Indirect Tax branch of Treasury is now responsible for fuel excise issues.
The government has focused on responding to the crisis in the Middle East and global oil shock over recent months. This included a reduction to the fuel excise rate and heavy vehicle road user charge and efforts to strengthen fuel supply chains as part of the Strengthening Australia's Fuel Resilience Package announced in the 2026–27 Budget. The Treasury Laws Amendment (Fuel Excise Relief) Act 2026 passed both houses of Parliament on 31 March 2026 and received royal assent on 1 April 2026.
The Bill temporarily reduced the fuel excise rates for petrol and diesel from 1 April to 30 June 2026 and was later extended (with a lower reduction) by the Treasury Laws Amendment (Fuel Excise Relief No. 2) Bill 2026 to cease on 2 August 2026 in line with indexation.
That Bill passed both houses on 29 June 2026 and received royal assent on 30 June 2026. The heavy vehicle RUC was also reduced to zero from 1 April to 30 June 2026 by the Fuel Tax (Road User Charge) Amendment Determination 2026. The government also reduced the heavy vehicle RUC by 16 cents per litre from normal rates through the Fuel Tax (Road User Charge) Determination 2026 from 1 July 2026 to 2 August 2026.
Advisers observed that the main areas of support for clients continues to relate to apportionment and off-road calculations. Advisers are assisting claimants to ensure that the use of evidence to support claims is appropriate, noting that some clients choose not to claim using the apportionment rate due to the level of risk with not being able to appropriately evidence their claims, particularly around fuel burn rates, auxiliary equipment and offroad usage.
Advisers also raised issues with the degree of substantiation required for methodologies that use telematics and GPS and noted an increase in the use of AI in initial apportionment calculations by clients, which required monitoring to ensure calculations were correct. Advice from the ATO in relation to the need for regular review of apportionment rates would be welcomed. A reasonable approach to audits and reviews depending on the size of the claimant was also supported.
Members generally noted the impacts of global fuel availability and security and expressed appreciation for clarification of excise fuel rate changes provided in messaging from the ATO. Members noted significant complexities and issues caused by rate changes also in relation to contractual arrangements, as well as the impact of higher fuel costs and availability of fuel on sustainability of businesses and critical supply chains.
Considering fuel security issues, there has been renewed discussion across industry in relation to other sources including alternative fuels and electrification; however, challenges remain around cost, compatibility of other equipment and infrastructure required to support electrification.
Members are anticipating government reform to address the increasing use of electric vehicles and potential changes to road charging.
Maritime Industry Australia Ltd sought any insights from the ATO on changes in maritime operation claims in relation to bunker fuels and excise remissions as opposed to traditional FTC claims, following the introduction of the bunker fuel remission from 1 January 2025.
Industry agreed that education was a key factor for FTC claimants and would appreciate ATO education products that claimants could refer to, particularly those in regional areas.
In addition to the FTC calculator, it was noted that there were some software programs that had a built in FTC calculators which was updated when the ATO released new rates so that FTC claims were correct. Transport Certification Australia noted that while many vehicles have a telematics device, this did not always guarantee correct reporting, particularly given conflicts found across systems.
Members noted the importance of FTC to businesses across all industry sectors.
|
Action item |
22072026-5-1 Bunker fuels regime |
|---|---|
|
Status |
In progress |
|
Responsibility |
Anthony Barnard, ATO |
|
Description |
ATO to liaise with Maritime Industry Australia Ltd to discuss the excise regime as it relates to bunker fuels and FTC claiming. |
Other business
As part of governance for stakeholder groups, the charter is required to be endorsed annually. The 2025 charter was provided in meeting papers for consideration.
No comments were received from members, and the updated charter will now carry over until the 2027 annual meeting. The 2026 charter will be distributed to members with the minutes of this meeting.
Members were advised that references to quick code (QC) page numbers in messaging are to mitigate risks of scam/malicious links. Entering the QC number in the search section on ato.gov.au will provide the appropriate webpages.
We are keen to support FSSG members through indexation rate changes and welcome industry feedback on ATO messaging at any time.
Attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Anthony Siouclis, (Chair), Small Business |
|
ATO |
Anthony Barnard, Small Business |
|
ATO |
Claudia Bianco, ATO Corporate |
|
ATO |
Kellysan Powers-Martin, Small Business |
|
ATO |
Mahmoud Fahda, Small Business |
|
ATO |
Mark Arnold, Small Business |
|
ATO |
Michael Brooks, Small Business |
|
ATO |
Michael Hughes, Small Business |
|
Association of Mining and Exploration Companies |
Darryl Daisley |
|
Australian Energy Producers |
Matthew Steen |
|
Australian Institute of Petroleum |
Malcolm Roberts |
|
BAS Agent representative |
Nikki Hannaford |
|
Bus Industry Confederation |
Glen Bortolin |
|
Commonwealth Fisheries Association |
Emma Rowe |
|
Deloitte |
Laura O'Brien |
|
EY |
Simon Whyte |
|
Fuel Tax Advisers |
Peter Perich |
|
KPMG |
Anthony Harmer |
|
KPMG |
Nick Boland |
|
Maritime Industry Australia Limited |
Sarah Cerche |
|
Minerals Council of Australia |
Will Lawrence |
|
National Farmers' Federation |
Charlotte Wundersitz |
|
National Farmers' Federation |
Guy Nicol |
|
National Road Transport Association |
Warren Clark |
|
Pitcher Partners |
Jason Scully |
|
Shipping Australia |
Melwyn Noronha |
|
Transport Certification Australia |
John Gordon |
|
Treasury |
Jack Elliott |
|
Treasury |
Liz Jaspers |
Apologies
|
Organisation |
Member |
|---|---|
|
Australian Trucking Association |
Bill McKinley |
|
Bioenergy Australia |
Shahana McKenzie |
|
Civil Contractors Federation |
Nicholas Proud |