The Victoria Tourism Industry Council (VTIC) welcomes this morning’s announcement that the Federal Government will delay the introduction of the so-called ‘backpacker tax’, pending a review.
The removal of the tax-free threshold (currently $18,200) for working holiday makers, announced in last year’s federal budget, was to take effect from 1 July 2016. The change would effectively treat travellers working on a Working Holiday Maker visa as residents for tax purposes, subjecting them to a 32.5 per cent tax rate from the first dollar earned. There will now be a review of the proposal.
“VTIC has opposed this tax since it was first put forward last year,” said VTIC Chief Executive Dianne Smith. “Not only is it a disincentive to visit Australia, but it will end up harming hospitality and tourism businesses that rely on Working Holiday Makers for labour.”
“We are very keen to be involved in the review process,” added Ms Smith. “International backpackers contribute over $600 million to Victoria’s economy, and over $3 billion nationally. We don’t want to alienate this sector of the market.”