Group governance
Integrity declaration
Members were advised of the introduction of an integrity declaration for all consultation groups. A copy of the declaration will be provided to members by email and need to be completed and returned prior to the first meeting in 2025.
Integrity declarations are to be signed annually by primary members of the group, as well as proxy members at meetings. They are not required to be completed by Commonwealth members, who are covered by other Australian Public Service guidelines.
Annual review
An annual review is required for all consultation groups to ensure relevant representation of industry organisations and associations. The 2024 review has been conducted with group membership remaining the same. For the 2025 review, consideration may be given to add other large petroleum excise payers.
Charter
The Petroleum Stakeholder Group (PSG) charter has been updated to include the integrity declaration and a draft was provided with the meeting papers. There were no comments received by members and the charter was endorsed.
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Action item |
PSG Charter |
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Responsibility |
Rowena Troth, Secretariat |
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Description |
Enquire if endorsed PSG charter can be published to PSG webpage. |
2023–24 reflections and 2024–25 compliance focus areas
The official excise duty collection figures will not be released until October 2024 however, collections for 2022–23 were approximately $20 billion. Final collections for 2023–24 is expected to be higher as the 2022–23 period was impacted by the temporary reduction in the fuel excise rate during that year. The top 10 excise payers contributed 96% of that amount.
Compliance assurance relies on early engagement with major excise payers in terms of sharing information and discussing changes in business processes and systems. The current fuel excise tax gap is considered very low at 1.7% or $297 million (2021–22). The Australian Taxation Office (ATO) tax gap team advised that such a low percentage can be subject to data and statistical variations however, the trend over time demonstrates a high level of compliance.
Diesel collections continue to increase, with petrol volumes quite flat. Excise centre are aware of an increase in the use of methanol in commercial shipping, as well as the use of gas, ammonia and hydrogen alternatives. The ATO noted a return of aviation fuel clearances to pre-COVID-19 levels.
The ATO’s compliance assurance in fuel excise is informed by the Excise Client Manager (ECM) program, with one-on-one engagement with the largest fuel excise payers. This program will continue into 2024–25, with the ATO gaining insights through interactions around changes in products, distribution, logistics and other issues relating to the fuel excise industry.
The last 2 years have seen significant changes in the ATO’s administration of excise, commencing with the introduction of online lodgment and payment of excise duty in September 2021, and the implementation of the deregulation measures. All major fuel excise clients are now using online services, with work carried out to resolve some transitional issues.
The ATO and the fuel industry continue to contribute to the government’s mandatory reporting of petroleum data to the Department of Climate Change, Energy, the Environment and Water.
The overall trend in the fuel excise tax gap results was queried and the ATO noted that it remains consistent over time and can provide details out of session.
The 2 main drivers for the decline in petrol collections was discussed:
- The increase in the number of diesel vehicles in terms of ‘light passenger vehicle fleets'.
- A trend over 20 years where light commercials have moved from a previous 50:50 split across diesel and petrol vehicles to the current 90:10 diesel to petrol vehicles.
While fuel economy has had some impact, the composition of vehicle fleets was more significant in declines in petrol usage.
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Action item |
Fuel excise tax gap results |
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Responsibility |
Michael Hughes, Director, Excise Experience |
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Description |
Michael Hughes to provide PSG members with a comparison of fuel excise tax gap results over time. |
Deregulation new measures
Royal Assent for the Excise and Customs Legislation Amendment (Streamlining Administration) Act 2024 was received on 28 June 2024, with amendments to respective regulations registered on 20 June 2024.
On 4 July 2024, members were advised by email of updated ato.gov.au content. 'Guidelines for the Fuel Industry' will be updated soon, and members will be advised upon completion.
Changes to legislation because of the new measures from 1 July 2024 include:
- Excise and Customs licence holders will no longer need to renew licences or pay a licence fee. Due to the late passage of the law, some excise equivalent goods (EEG) warehouse licence fees were paid for 2024, however these have since been refunded.
- Clients can apply for entity-level licences from 1 July 2024. Previously, multiple licences for each premise were required where an entity had multiple premises. Changes now mean that these can be consolidated into one licence with an attached schedule providing details of the various premises. These will not be automatically issued, and clients will be required to apply for this change.
- A new General Movement Permission (GMP) is available to allow clients to move goods from any of their premises to any other premise that is licenced to receive those goods. These are optional and can be in addition to other permissions. Previously, the law focussed on movement permissions specifying details of both premises. A consideration of granting a GMP will be that there are adequate controls in place to account for goods being moved.
- The ATO will be publishing a public register of licence holders providing the name and Australian Business Number of all clients holding an excise or EEG licence. It will be updated monthly to provide clients with a reference point for potential engagement for movement and storage of goods. A link to the register will be provided to members.
- The entitlement to claim excise refunds for excise duty paid on or after 1 July 2024 has been extended from 12 months to 4 years to align with customs duty and other indirect taxes.
- The measure has introduced a simplified method for refund claims relating to vapour returned and recovered in a Vapour Recovery Unit (VRU). Previously, VRUs had to be tested every 6 months. From 1 July, a single rate can be applied to determine entitlements. This can be claimed on a weekly basis or periodically.
- Onshore producers of crude oil and condensate are no longer required to hold an excise licence. This measure is more relevant for upstream producers. Current licence holders will be asked to surrender these licences.
- Clients will be able to claim a refund of customs duty paid on imported lubricants used in manufacturing This measure resolves previous double taxation issues raised by PSG members. This will be administered by the Australian Border Force (ABF), customs duty who have issued an Australian Customs NoticeExternal Link to provide more information.
From 1 January 2025, duty will not be required to be paid on fuel for use in ships meeting certain conditions. This is commonly referred to as the bunker fuel measure. Excise centre is currently updating web content and members will be advised when this is completed. The ABF will be issuing an Australian Customs Notice relating to this measure.
The implementation of the measures will continue over coming months because of many years of advocacy from the ATO and industry.
The ATO provided more details of the entity level licensing and GMPs. As the legislation has only recently been passed, members noted that they would now consider optional licensing changes.
Excise client managers will be contacting clients to discuss potential options because of the changes which might assist in reducing administrative burdens.
ATO technical advice
A draft version of ATO Practice Statement Law Administration PS LA 2003/1 – Petroleum excise duty – reporting for adjustments outside the current reporting period is included with meeting papers. Members noted that amendments over 12 months require a reason code to be included. Members did not raise any concerns with the draft document.
Industry updates – roundtable
Difficulties for clients in the timing of the indexation rate, particularly when the date of effect occurs after the first of the month and the extra administration required in pricing where it needs to be updated on the first of the month and then a few days later when indexation takes effect, was discussed. It was noted that the rate changes were tied to the publication schedule of the Consumer Price Index by the Australian Bureau of Statistics.
Members queried if work was being carried out by Treasury or the ATO regarding renewable fuels including renewable diesel. Treasury considers fuel and all taxation settings on an ongoing basis, with policy decisions being a matter for government. Ampol may consider a submission for law change if this becomes a larger issue. The ECM program was very beneficial for Ampol in terms of open and transparent engagement on issues as they arise, with quick resolution.
The ongoing issues relating to the use of myGov and RAM online systems where employees are based offshore was discussed. Current processes to provide access to offshore employees was considered complicated and very slow. BP has recently released their 2024 Energy Outlook (PDF 2.22 MB)This link will download a file which provided a global view of petroleum, oil and emerging markets.
A functionality issue relating to ATO’s Business Portal was raised. The ATO will pass on that feedback to systems staff. It was queried whether a deferred payment option remained an item for future advocacy for law change. It was noted that increasing rate rises mean that there is a burden on business to carry clients on longer term payment contracts. Treasury advised that all options for deregulation were considered as part of the new measures package, and any issues not part of that package would require future advocacy for law change. The use of electric vehicles in the USA is, and while Australia’s transition is slower, the move to electric vehicles will impact future diesel collections.
Attendees
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Organisation |
Attendee |
|---|---|
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ATO |
Tony Poulakis (Chair), Small Business |
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ATO |
Anthony Barnard, Small Business |
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ATO |
Anthony O’Connell, Small Business |
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ATO |
Bonnie Joshi, Small Business |
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ATO |
David Maurovic, Small Business |
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ATO |
Jack Stewart, Small Business |
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ATO |
Jill Tanner, Small Business |
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ATO |
Mark Arnold, Small Business |
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ATO |
Michael Brooks, Small Business |
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ATO |
Michael Hughes, Small Business |
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ATO |
Nathan Lindemann, Small Business |
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Ampol Australia Petroleum Pty Ltd |
Megan Kirkby |
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Australian Border Force |
Alex May |
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Australian Border Force |
Kimberlee Clydesdale |
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Australian Border Force |
Nikki Doan |
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Australian Institute of Petroleum |
Alistair Davey |
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BP Australia Pty Ltd |
Bill Barton |
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BP Australia Pty Ltd |
Waruna Peiris |
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Exxon Mobil Oil Australia Pty Ltd |
Darren Koh |
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Treasury |
Caitlin Payne |
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Treasury |
Isaac Rosser |
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Treasury |
Liz Jaspers |
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Treasury |
Zoe Chalmers |
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Viva Energy Australia Pty Ltd |
Helen Curran |
Apologies
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Organisation |
Member |
|---|---|
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Exxon Mobil Oil Australia Pty Ltd |
Grace Abinoja |