We're a Baker Tilly network member
Learn more
Federal Budget 2022-23: Fuel excise relief
Article

Federal Budget 2022-23: Fuel excise relief

In response to growing cost of living pressures, the Government has announced a temporary reduction in fuel excise of 50% equal to 22.1 cents per litre.

Temporary excise reduction

As highlighted in the lead up to the Budget, the Government has announced a temporary 50% reduction in the excise imposed on fuel, bringing the excise from 44.2 to 22.1 cents per litre. Providing a saving to both consumers and businesses this measure will be in place for a period of 6 months commencing on 30 March 2022 and ending on 28 September 2022. For businesses that claim full fuel tax credits, for example off road heavy machinery operators, the change will be irrelevant as they will continue to claim full fuel tax credits albeit at the lower rate.

The current fuel tax credit entitlement for heavy vehicles travelling on a public road is reduced by the road user charge, leaving operators with a net entitlement of 17.8 cents per litre.  With the reduction in excise, operators of heavy vehicles used for travelling on public roads will be 4.3 cents per litre better off.

The measure will be of most benefit to light vehicle business operators and private consumers who will receive the full 22.1 cent saving per litre. This excise reduction will also reduce the amount of GST payable by a further 2.21 cents per litre. In this sense the measure is well targeted.

The benefit of this measure is expected to flow through to consumers within a few weeks as petrol stations replenish their stocks.

Excise payment concession

As part of its cash flow support and red tape elimination measures, the Government has announced that manufacturers, importers and distributors in the alcohol and fuel sectors with a turnover of less than $50 million will be able to report their excise and excise equivalent customs duty on a quarterly basis.

At present these entities must report monthly and even weekly, so the change will have a significant cash flow impact on these taxpayers. This measure is due to commence on 1 July 2023.

Return to Federal Budget hub

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

Our experts

Ben Brazier

Ben Brazier

Managing Principal Adelaide
Nigel Fischer

Nigel Fischer

Managing Partner Brisbane
Brendan Britten

Brendan Britten

Managing Partner Melbourne
Michael Minter

Michael Minter

Managing Partner Newcastle and Hunter
Leon Mok

Leon Mok

Managing Director Perth
Adam Irwin

Adam Irwin

Managing Partner Sydney
Pitcher Partners insights Get the latest Pitcher Partners updates direct to your inbox

Thank you for you interest

How can we help you?

Business or personal advice
General information
Career information
Media enquiries
Contact expert
Become a member
Specialist query
Please provide as much detail to ensure appropriate allocation of your query
Please highlight a realistic time frame that will enable us to provide advice within a suitable and timely manner. Please note given conflicting demands with our senior personnel, we will endeavour to respond to you within the nominated time frame. If you require an urgent response, please contact us via [email protected] or 03 8610 5477.
CPN Enquiry
Business Radar report
Student careers 2021-22
Find an expert
Search by industry