In a fairly important development, the Federal administration of Australia has reportedly delayed the plans to tax the wages of the holders of the Working Holiday Visas on 462 and 417 Visas, by a period of six months. But, in case comparable amendments go through, the latest tax laws from 1 January 2017 may see 'backpackers' forced to shell-out much higher taxes, vis-à-vis the local people.
The latest tax regulations made public before, as component of the 2015 National Budget, had been rather strongly opposed by farmers and the tourism segment, in the process, leaving no options for the Australian immigration except to appraise the plans.
A great deal of the opposition allegedly comes from the possible effect of the latest tax laws on the country’s regional personnel. The planned tax amendments ignited further fears of reduction to an already exhausted working holiday maker labor force. The decrease in the figure of the backpackers is probable to also damage the businesses dependent on seasonal employees, like farmers, for instance.
As per some observers on the subject, the latest tax laws slapped on the holders of the Working Holiday Visa may not be in the interests of the nation’s global competitiveness. The nation in particular would find it pretty difficult to draw youth visitors, resulting in increasing figures of un-standardized cash payments to seasonal manpower.
Over the coming 5 years, through the Australian tourism business alone, there's likely to be a famine of 127,000 employees. Overseas employees represent roughly one-tenth of the tourism industry's personnel even as there’s a pressing requirement of 40,000 Working Holiday Makers per annum for the country’s agricultural industry.
Backpacker Visa Tax
It, initially listed for introduction from July 1 2016, would have found the visitors on the Australian Working Holiday Visas forced to shell-out 32.5% on every dollar taken home, having formerly had to give no tax on the earnings of a maximum of 18,000 Australian Dollars (9,500 British Pounds).
Under the latest tax regulations, a non-resident in Oz, taking home roughly 40,000 dollars every year, is potentially subjected to a personal income tax totaling to 13,000 dollars, in the process, leaving them with a net income of 27,000 dollars.
The present tax laws witness a non-resident person, taking home 40,000 dollars every year, taxed only 4,547 dollars in personal income tax, leaving a net income of 35,453 dollars. Still, while the holders of the Working Holiday Visa could presently give less in income tax, they give far more, vis-à-vis the citizens of Oz in other regions.
For example, though when impermanent residents leave the country, they're allowed to withdraw their whole pension (called superannuation), they pay a tax of anywhere from 38 to 47%. As against it, the residents of Down Under--who withdraw their pension before hitting the 55 year mark--are taxed at merely 20%.