Shipping Australia has for many years canvassed for the abolition or simplification of unnecessary processes and paperwork in the the excise administration for fuel. We have re-iterated this call in our submission to the De-regulation Taskforce of the Department of Prime Minister and Cabinet.
Historically, arduous bunker fuel excise administration in the shipping industry has adversely affected Australian shipping agents. On average, annually there are 25,000 Australian port calls serviced.
Shipping agents, acting on behalf of vessel operators, are subject to red tape and completion of unnecessary paperwork to pay bunker fuel excise to the Australian Border Force and then recover the full excise from the Australian Tax Office.
So the shipping industry is made to pay one arm of the Australian Government and is then allowed to recover the full amount from another part of the Australian Government. So there’s no benefit to the Australian Government.
There are issues with administration as overseas-Australia-overseas voyages uses fuel on an international voyage that transforms into a domestic voyage when then transforms back again into an international voyage. In some cases ship operators may use different shipping agents during one voyage. And in some cases agents were unaware that duty paid was recoverable for international companies and that a fuel tax credit is available for companies registered locally.
This is a recipe for confusion. There are also complex sets of processes and paperwork.
“Registration is far from simple and requires tremendous paperwork. The bunker excise is claimed back by sending a number of papers to an email address and then the waiting game begins. The entire process seems incredibly ineffective,” one Shipping Australia member said.
Other members complained of grey areas in respect of who is entitled to claim. They have complained of complicated rules that result in “costly to rectify” rules.
Meanwhile, the Tax Office refuses to pay a refund to an overseas bank account – that’s not a good policy when dealing with international companies. So non-resident shipping operators have to register a business in Australia to open a local bank account. Once a business is registered then regular forms need to be lodged irrespective of activity, even if there is no activity.
There are many other problems too.
For instance, the responsibility to pay duty rests with the ship master. Once that rule may have made sense… say, 150 years ago.
Back then there were hardly any (if any) speedy international telecommunications and ships took months and months to sail anywhere. Today, a ship master is a highly skilled employee. There’s no reason to make him or her liable to pay duties. We have instantaneous international banking now.
There are many other issues of a technical tax administration nature. It’s clear the process and the paperwork is all just too much for little-to-no benefit for anyone.
“It is clear that the current process of payment and subsequent recovery of bunker fuel excise is onerous and adds no value to the Australian Government. We strongly urge that this review streamlines the excise administration for fuel
by cutting this regulatory overhead for the shipping industry,” Shipping Australia stated.