Tuesday 23 January 2018

Irish escape 'backpacker tax' in Australia - for now

Controversial 'backpacker tax' in Australia to be delayed following flood of complaints

(Stock image)
(Stock image)

Meadhbh McGrath

Plans to introduce a controversial “backpacker tax” in Australia are to be delayed following a flood of complaints from farmers and the tourism industry.

Irish citizens on working holiday visas are currently able to access the country’s A$18,200 (€11,735) tax-free threshold.

Under the proposal, foreign travellers would be treated as non-residents and taxed at 32.5pc on every dollar earned from July 1.

The proposal was met by a swift backlash from members of the tourism and farming sectors, who said their industries would be threatened by the higher tax.

Industry bodies warned that higher taxes would push working holiday-makers to choose destinations such as New Zealand and Canada over Australia.

On Tuesday, Assistant Treasurer Kelly O’Dwyer announced that the tax would be deferred for six months until January 1, 2017.

“I can tell you with great certainty that this is very good news for rural and regional communities; it’s good news for our tourism sector; and it’s good news for working holiday makers,” she said.

The country is gearing up for a general election on July 2, and members of the opposition Labor party accused the government of orchestrating the move as a “stunt to push the issue beyond the election”.

Australia granted 214,830 working holiday visas in 2014-15. Some 11,996 visas were granted to Irish citizens in 2014.

The government estimates that the introduction of the higher tax rates will raise about A$540m (€348m) over three years.

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