Offshore liquefied natural gas (LNG) producers would be taxed more under a federal government proposal to shore up domestic supply and “ensure Australia remains a reliable international energy supplier and investment partner.”
The changes to the petroleum resource rent tax (PRRT) would put a cap on deductions, limiting the proportion of PRRT assessable income that can be offset by deductions to 90 per cent.
The changes respond to the Treasury Gas Transfer Pricing (GTP) review, as well as recommendations in the earlier Callaghan review.
The federal government is introducing changes to the PRRT which would see offshore LNG producers limited in the amount of deductibles they can claim. Picture: Supplied/Inpex Australia
The government will adopt eight of 11 recommendations in the GTP review, and a further eight from the Callaghan review.
It’s expected to generate $2.4bn in tax receipts over the forward estimates.
“Under the current rules, most LNG projects are not expected to pay any significant amounts of PRRT until the 2030s,” said a government media release, “the changes announced [Saturday] address this issue.”
It’s hoped the changes will come into effect from July 1.
“These sensible changes see the offshore LNG industry pay more tax, sooner.” – Treasurer Jim Chalmers. Picture: NCA NewsWire / Martin Ollman
“It’s been clear for some time that the PRRT isn’t up to scratch,” said Treasurer Jim Chalmers, “that’s something most Australians would agree with, including the former government that initiated the review.”
“These sensible changes see the offshore LNG industry pay more tax, sooner.
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“They also deliver a fairer return to the Australian people from the resources they own, provide certainty to industry and ensure Australia remains a reliable trade and investment partner.
“These changes will make a meaningful contribution to the Budget that we hand down on Tuesday night, helping to support our efforts to get the nation’s finances back on track, fund vital services and provide responsible cost-of-living relief.”