Australia to Impose Backpacker Tax

The government has lowered the tax from 32.5% to 15% following outcry

Photo source:http://www.flickr.com/photos/malczyk/5619108436/ 

The Australian government has announced that it will support the imposition of a 15% tax rate on working tourists in the country reports BBC.

Although the government had originally proposed a 32.5% tax rate, it lowered the same to 15% following huge outcry from tourists and farming operators. It is reported that most backpackers that come to Australia work as fruit pickers in the country’s vast farmlands.

Treasurer Scott Morrison said “Today the government will be working to put in place a bill which will propose 15% on the backpackers’ arrangement.” He added that lessening the rate to 10.5%, which is what the opposition favored, would cost the country A$120m over four years.

The opposition fears that increasing the tax rate or imposing one at all will deter travelers to come to the country and thereby affect tourism. Currently, backpackers are not subject to taxation unless their yearly income exceeds A$18,200 ($13,500).

Read more here

Related article:

Backpacker Visa Changes in Australia Could Mean Organic Farmers in Trouble