Australia’s new tax on visitors

27 February 2016 by News Desk   |   SHARE  

Australia is introducing a new tax on overseas travellers who are employed in the country on working holiday visas.

From July 2016, foreign travellers on Australian working holiday visas will have to pay tax at 32.5 per cent. Up until now they paid no tax on income up to AU$18,000.

The government has encouraged overseas travellers to work on farms with special visas that allow them to stay on for a second year if they spend three months working in rural Australia.

However, farmers and tourism chiefs say the new tax policy could deter many visitors from seeking work in the country. Farm labour is not highly paid and the new tax could prevent many travellers from working in rural areas.

Farmers add the new tax will hit annual production as travellers on working holiday visas make up the majority of fruit pickers during the harvest season. At this time around 70 per cent of the labour force is casual workers.

Farm producers are already struggling to find enough workers according to a recent study by the National Farmers Federation.

The problem will be particularly acute this year as Australian fruit exports are forecast to reach a record AU$2.27 billion, an increase of 10 per cent from the previous season.

Darrell Todd, Founder of thinkingaustralia, says: “If you’re planning a working holiday Down Under contact us today to find out how this new tax policy could affect you.”

Around 591,000 people each year travel to Australia for a working holiday. They spend AU$4.3 billion a year which represents around 12 per cent of all foreign tourist spending.

Overseas visitors generate AU$34.8 billion a year for the economy but tourism chiefs fear the higher tax could mean young travellers decide not to stay as long in the country.

The government says the planned increase in tax for working travellers will generate AU$540 million over the next four years.

You can find information on Working Holiday Visas here.

If you’re interested in finding out more about Australia in general then visit our About Australia and Travel sections.