Airlines slugged for stamp duty
A report in The Australian says that airlines have accused state governments and the Insurance Council of Australia of collaborating to slug airlines with charges averaging $120 to $150 per flight.
South Australia now appears set to join Western Australia and Victoria in charging airlines stamp duty on their global insurance policies.
The Board of Airline Representatives of Australia says that in some cases the impost is considerably higher than the average and adds hundreds of thousands of dollars a year to the cost of operations to and from Australia.
BARA says Australia, led by offices of state revenue in Western Australia and Victoria, is the only jurisdiction in the world to impose the duty on international airlines.
Western Australia and Victoria have assessed some airlines as liable for duty, and the airlines have paid.
South Australia’s revenue authority has sought information from the airlines but has yet to issue any assessments. Other states and territories have yet to ask airlines about the issue.
“BARA and its member airlines find it particularly offensive that the methodology adopted by the OSRs for the purpose of assessing stamp duty liability of airlines was determined in secret from the airlines.”
The airlines are angry that state governments have backdated the stamp duty.
BARA says the OSRs only began collecting insurance details from airlines in 2005 but assessments go back as far as 2000-01.
They also disagree with the apportionment schedule used to set out the proportion of an insurance policy the states believe they can tax.
This determines risk on the basis of the number of take-offs and landings in each jurisdiction of all aircraft covered by the policy.
BARA believes this is completely inappropriate measure of the true extent of any risk attached to the states.
“As one would expect, this phoney apportionment factor delivers a much higher stamp duty assessment than is reasonable under the circumstances,” the BARA newsletter says.
The association is demanding a review of the method for assessing stamp duty – and says it should involve airlines.
Report by The Mole
John Alwyn-Jones
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