Biosecurity Import Levy – background and current status
Who does this notice affect?
Importers, freight forwarders, customs brokers, stevedores, shipping lines, airlines, express couriers, e-commerce providers and Cargo Terminal Operators.
Biosecurity Import Levy
Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) members have understandably been seeking updates on the proposed Biosecurity Import Levy.
While we are unfortunately not in a position to provide definitive answers, we trust that the following provides useful background and the current status of this new tax.
Background
As members will recall, the Biosecurity Import Levy was announced in the 2018 Federal Budget with an aim to collect $325 over 3 years from a commencement date of 1 July 2019.
Since that time there has been significant controversy surrounding the implementation of the levy, ultimately leading to the former Minister for Agriculture and Water Resources announcing the formation of the Biosecurity Levy Steering Committee tasked with recommending the possible scope and design for a levy.
As outlined in previous member notices, I was privileged to be appointed by the Minister to participate with eight other industry representatives in the committee led by an independent chair (Mr David Trebeck) and supported by Pegasus Economics – refer HERE.
To allow the steering committee adequate time to report and as outlined in the last Federal Budget, the government announced a new proposed date of 1 September 2019 and a relatively small loss of revenue associated with this deferred commencement.
Current Status
In line with the Steering Committee’s responsibilities, a final report was provided to government on 31 May 2019.
There was an overwhelming and consistent message from industry (Steering Committee members AND respondents to our discussion paper) to move away from the models originally proposed by the Department of Agriculture to a simple administrative collection model against the Full Import Declaration (FID) receipt.
We understand that the quantum and collection mechanism remains subject to a cabinet discussion/decision.
Legislation will be required to support this tax measure (please note the levy is NOT a cost recovery mechanism). This entails legislative drafting (which we assume has commenced) and Parliamentary debate, including the potential of a Senate inquiry.
Assuming the government adopts the Steering Committee’s recommendations, the Department of Home Affairs will be required to make the necessary changes to the Integrated Cargo System (ICS). Our extensive experience over many years has been that ICS enhancements take considerable time to implement.
FTA is in regular contact with the Minister’s office, emphasising the need for predictability in fees and timing of implementation to accurately forecast landed costs. Feedback to date is that the matters raised are under active consideration and that the government is keen to be able to report more specifically as soon as possible.
While 1 September 2019 remains the target date for implementation, the above factors may have an adverse affect on achieving this outcome.
FTA has scheduled a meeting with the Minister’s office in Canberra on 31 July 2019 and will report outcomes as they come to hand.