A government commission has recommended repealing the “zone tax offset” program.
The zone tax offset was introduced in 1945 to assist employees with the cost of living in remote areas by reducing income tax paid on higher wages. In general, the outer border of areas eligible for the zone tax offset has been unchanged since 1945. Among the qualifying areas included in “Zone B” are Mackay, Townsville, and Cairns—places that that were clearly isolated, but that have developed into well-serviced cities, now with significant populations. Accordingly, the commission’s draft report has questioned the appropriateness of the zone tax offset in these and other regions.
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