Trucking industry fuel tax cuts

The Australian Government has officially signed off on a reduction to the truck fuel tax rate, which is anticipated to provide much needed savings for owner-drivers and small fleet operators.

When will the fuel tax cuts take effect?

Australian Minister for Infrastructure and Transport Darren Chester authorised the determination in mid-April, which will come into effect from 1 July 2016.

The Fuel Tax Act 2006 was established to collect the Road User Charge (heavy vehicle fuel tax), which is a reduction in the fuel tax credit given to relevant businesses. The Road User Charge applies to each litre of diesel fuel used by heavy vehicles on Australian roads during the financial year.

During 2015, the National Transport Commission conducted a public consultation. A final decision was announced in November last year to decrease the Road User Charge to 25.9 cents a litre in 2016-2017.

Expected to save trucking companies thousands

Although this decrease is less than 1 per cent on the 2015-2016 level of 26.14 cents per litre, it is expected to save some heavy haulage companies thousands.

According to the Australian Trucking Association, this is a welcome tax relief, with the sector targeted with multiple additional costs to use Australian roads. State and federal governments charge all heavy vehicles that travel public roads for business purposes additional fees and taxes to compensate for construction and maintenance costs.

Various state and territories recovery some of these costs through heavy vehicle registration charges, while the federal government uses the Road User Charge.

Slight tax relief

This slight tax relief is predicted to save owner-drivers about $200 in the 2016-2017 financial year, while small fleet operators could salvage more than a $1,000.

“The trucking industry pays for our use of the road system through heavy vehicle registration fees and a road user charge on fuel. However, the industry has been overcharged since 2007, because the system used to calculate the charges underestimates the number of trucks on our roads,” Australian Trucking Association chief executive officer Christopher Melham said.

National Heavy Haulage remains up-to-date with all industry and regulatory developments to ensure its clients receive the safest and most compliant transport services.

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