The ATA says the six month fuel tax cut, is creating havoc for trucking operations which until the 29 March, were paying an effective fuel tax rate of 26.4 cents per litre, under the Government’s road user charge regime.
Trucking companies would normally receive the difference between the fuel tax rate and the road user charge as fuel tax credits on their activity statements. However they will not receive fuel tax credits for their on-road fuel use during the period of the reduction.
This means that the effective fuel tax reduction for trucking businesses is 4.3 cents per litre, in other words 26.4 cents per litre less 22.1 cents.
The ATA reckons this has created issues for the industry.
Although fuel levy formulas in industry contracts may need to be renegotiated, freight company customers are now looking to see a reduction in freight rates based on the 22.1 cents per litre reduction, rather than the actual 4.3 cents per litre reduction. As a result businesses are also having to focus on managing their cash flow, given they will be paying less at the pump but will not receive on-road fuel tax credits on their activity statements to offset their other tax liabilities.
The ATA says the only way to resolve these issues efficiently is for the Government to reduce road user charge by 22.1 cents per litre, giving road transport operators the same benefit from the fuel tax reduction as light vehicle operators.