A new state tax levied by the Queensland Government may deter foreign investments in the state making them look elsewhere for greener pastures.
Queensland is increasing its land tax absentee surcharge from 1.5% to 2% extended to trustees of foreign trusts and overseas corporations. This may discourage foreign investment says a new report. This will be included in the State Government’s 2019-20 Budget. The decision is are estimated to raise a total of $778 million respectively over the forward estimates.
Many foreign companies will be affected by this new rule. They will be paying double the tax they did last year. 2018 saw a rumored 25% increase in land taxes and 2019 will see an added 10%. Though the move will create a roar but more than that it will redirect further investments from the state. Offshore businesses will seek their enterprise dream in places that offer more relaxed tax policies.
The state government has a different story to tell. Queensland is among the lowest taxed states in the country. A spokesman for the Deputy Premier and Treasurer said, “Queensland’s land tax rates are amongst the lowest, and the thresholds at which land tax becomes payable are amongst the highest, in Australia, the changes to land tax rates will affect fewer than 5 per cent of Queensland companies and trusts.”
The industry that will be massively affected by the increased tax rate, will be sugar, who are already bailing under the pressure of low global sugar prices, high electricity cost and unfortunate yields. They are looking for reprieve in this competition charged market. The state government has announced that it may extend the olive branch to some companies who have been severely affected.