Carbon Tax Relief for Aviation and Maritime Charities

The Gillard Government has launched a Charities Maritime and Aviation Support (CMAS) Program to provide carbon tax relief to Not for Profits in the air and sea rescue sector.

The Government's new carbon tax scheme aims to make the nations largest polluters pay a tax for the amount of carbon that they produce into the atmosphere. The tax will come into effect on 1 July and is designed to reduce human induced climate change.

Under the CMAS program, the Government has said that eligible charities will receive financial assistance to cover the cost increase associated with the carbon price on aviation and maritime fuels purchased for eligible transport activities.

The Philanthropy and Exemptions Unit of the Treasury provided the following example to explain how the CMAS program would operate:

Based on previous consumption data, an eligible charity could estimate it would purchase 100,000 litres of aviation kerosene in the 2012/13 financial year for the purposes of eligible activities, the assistance available would be approximately $5,980 ex GST.

This is based on the increase of $0.0598 cents per litre on the fuel excise applicable to aviation kerosene under the carbon pricing legislation.

To be eligible to apply for assistance under the CMAS Program, a charity must meet all of the following eligibility requirements:

• be a registered charity,
• be endorsed as a Deductible Gift Recipient (DGR) by the Commissioner of Taxation, and
• the maritime and/or aviation activities must be in respect to the DGR status.

The Rebates will be accessible under the program in relation to all types of taxable fuels used for eligible maritime or aviation transport activities that are either:

• purchased, and used, by eligible charities, or
• purchased on behalf of eligible charities as part of hiring/chartering arrangements of fuelled craft, where the fuel costs are identifiable within the hire/charter cost

The CMAS Program said that marine (and rail) transport effectively pay no excise on the fuel they use, as their excise is offset under the fuel tax credits scheme.

“An effective carbon price will be put on those activities through reduced fuel tax credit entitlements in the same way that it applies to off-road business use.

“As different fuels emit different amounts of carbon when they burn, the fuel tax credit changes for petrol and diesel will be determined according to their specific level of emissions.”