| 1997-98 | 1998-99 | 1999-00 | 2000-01 |
| 12.5 | 25 | 25 | 25 |
Explanation
The Government will take measures to prevent illegal blending and direct substitution of petroleum products. This measure will ensure that it will be difficult for those who currently avoid paying the correct rate of excise to continue to do so. The Australian Customs Service (ACS) advise that currently people are illegally blending and substituting concessionally taxed fuel or tax free products (such as solvents) for fuel taxed at a higher rate.
A chemical tracer (a marker dye or colourless marker) will be added to concessionally taxed fuel and tax free products just prior to their leaving Customs' control and entering the petroleum distribution system. The chemical tracer will enable the ACS to verify that concessionally taxed fuel is indeed being used only for purposes for which the concession is intended. This will assist the ACS to better collect excise properly due under the existing legislation. To give full effect to the intent of Government policy, the Government will legislate to prohibit certain direct fuel substitution activities.
The details of implementation are to be the subject of post-budget consultations between the ACS and the major oil companies, the petroleum products distribution industry, State government revenue and consumer affairs bodies, and other interested parties. The measures will take effect from 1 January 1998.
See also the outlays measure titled 'Increased running costs associated with measures to reduce fuel substitution' described in Part I of this Budget Paper under the Industry, Science and Tourism portfolio.
