The Federal Government has announced plans to increase stricter rules pertaining to the Petroleum Resource Rent Tax (PRRT).
The changes were in response to a review of the PRRT by independent economy expert Michael Callaghan AM PSM.
Federal Treasurer Josh Frydenberg announced that starting from 1 July 2019, uplift rates, which allow the cost of developing oil and gas projects to be forwarded against future tax liability, will be lowered by up to 5 per cent.
This change will not extend to existing investments, only to those that have not been granted a licence by the end of the financial year.
Additionally, onshore projects will be removed from the PRRT regime and the treasury will commence a review into the regulations that determine the price of gas in integrated LNG projects for PRRT purposes.
In a statement released by the Treasury Department, Mr Frydenberg said the changes would increase tax revenue from the oil and gas industry.
“These changes will ensure production of our petroleum resources are taxed appropriately while continuing to support the development of our world leading LNG industry,” he said.
“The new uplift rates and removal of onshore projects are expected to raise $6 billion over the next decade, to 2028-29.”
For a full copy of the treasury response to the Callaghan review visit the treasury website.
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