Katter welcomes legal action over backpacker tax

Australian backpacker tax subject to legal action


Kennedy MP Bob Katter is calling for the backpacker tax to be scrapped.

Kennedy MP Bob Katter is calling for the backpacker tax to be scrapped.

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Backpacker tax subject to legal action

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The validity of the Federal Government's controversial backpacker tax has been brought into question after legal action commenced this week on behalf of working holidaymakers from eight countries, including the United Kingdom and the United States.

The action against the Federal Government has been initiated by Taxback.com, an international tax accounting firm that provides global tax refund and tax return services.

The company argues that the backpacker tax introduced in January 2017 contravenes non-discrimination clauses built into tax treaties that Australia has signed with eight countries: the UK, the US, Germany, Finland, Chile, Japan, Norway and Turkey.

Taxback.com Commercial Director, Eileen Devereux, said the action was an important step to protect foreign workers and Australia's reputation as a working holiday destination.

"Our starting point is that by discriminating against foreign workers the tax is fatally flawed. The tax unfairly targets working holidaymakers. It runs in direct conflict with Australia's obligations under multiple international tax agreements. In doing so, it also harms the reputation of Australia's tourism sector,” Ms Devereux said.

"There's no doubt that the backpacker tax has left a sour taste in the mouths of many visitors, and that can only harm Australia's ability to attract visitors in future. This is why we are asking the Australian Government to reconsider its position on this matter."

The legal action has been filed in the Queensland Federal Court and seeks 'declaratory relief' from the backpacker tax for citizens of the eight affected countries – in effect, rendering them exempt from the tax.

Visitors from the eight countries account for approximately 50 per cent of all visitors who come to Australia on 417 or 462 Working Holiday Visas.

Kennedy MP Bob Katter has applauded the move saying axing the tax was ‘vital’ to the long-term survival of tourism and horticulture in Australia.

Mr Katter said the tourism and horticulture industries in Queensland had suffered tremendously since the tax was introduced.

“The backpacker tax has dealt a deadly blow to the tourism, bananas, mangoes, paw paws, blueberries – the whole horticulture industry. And what for…for a lousy snivelling $50m,” he said. 

Mr Katter warned that the current tax arrangements were leaving local tourism industries out of pocket by not just taxing the backpacker, but taxing the tourism operator by extension. 

“The tourism industry is built around handsome young people coming from these European countries and the Americas, they are always people with a bit of getup and go, adventure and excitement. They leaven our communities in every way.

“Nearly every cent that a European or American backpacker earns here (by fruit picking) is also spent here.

“Whatever money you take out from taxation, you are depriving the Australian tourism industry of.

“That 15 per cent taken out in tax is taken out of the pockets of every tourism operator in Australia.”​

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