Significant Pay-roll Tax reform passed in Parliament: Fraser

The most significant change to Queensland’s pay-roll tax system in 30 years was passed by Parliament today Treasurer Andrew Fraser said.

Mr Fraser said the harmonisation of payroll tax provisions across Queensland, New South Wales and Victoria will provide a huge benefit to companies doing business across the three jurisdictions.

“The world of business doesn’t recognise state boundaries and to enforce different pay-roll tax regimes on companies operating in different states was a real impediment to economic efficiency,” Mr Fraser said.

“Harmonisation of pay-roll tax provisions will eliminate the confusion of having different rules and pay-roll tax outcomes in different states.”

The major changes in pay-roll tax amendments are:

• Reducing pay-roll tax liability for business through increased motor vehicle and accommodation allowances by aligning with ATO rates
• Aligning Queensland’s grouping provisions, contractor provisions, employment agent provisions and employee share schemes with New South Wales and Victoria
• Reducing pay-roll tax liability through a number of new exemptions including maternity and adoption leave and wages paid to volunteer firefighters and emergency services workers

Mr Fraser said the Office of State Revenue will work with industry to implement the changes.

For the period of transition, the Commissioner of State Revenue has indicated he will exercise his discretion with regard to penalties and interest to ensure a smooth transition to the new arrangements.

Mr Fraser said Queensland would retain Australia’s lowest pay-roll tax rate of 4.75 per cent and its $1,000,000 threshold.

The legislative changes passed today will take effect from 1 July 2008.

Further detail about the Queensland pay-roll tax system changes is available on the Office of State Revenue website at www.osr.qld.gov.au.

Media Contact Chris Taylor 0419 710 874