The Australian Capital Territory is one of three states to levy a carbon tax on households and businesses.
But it’s the only one of the three to have an overall rate of revenue of more than $10 per tonne.
That’s because the tax is assessed against each dollar of taxable income.
That means households and small businesses will pay a bigger percentage of their income in carbon taxes.
So, while the tax has helped some households and business owners, it hasn’t boosted Australia’s economy.
The Government has promised to introduce a carbon price by 2019.
But if it doesn’t, the price is unlikely to go into effect.
What is the carbon tax?
The carbon tax is a tax on emissions from electricity, gas and other fossil fuels.
It’s intended to help low- and middle-income households and individuals pay for climate change mitigation.
It’s the first of a series of measures the Government is proposing to introduce in the coming years to tackle climate change.
The carbon tax will include a $20 per ton of carbon emissions surcharge on fuel and electricity imports, which will apply to goods and services coming into Australia.
How much will the tax cost?
For each dollar the carbon price is levied, the Government will receive $100.
But this isn’t all about the cost of the tax.
It will also be used to offset the carbon taxes paid by businesses and households.
For example, if you pay a $50 tax, you’ll receive $50 in revenue from the carbon levy.
And if you buy a car from a business and drive it to work, the business will receive a $15 carbon levy payment.
Who will pay the carbon levies?
All taxpayers will pay.
In most cases, it will be households, small businesses and businesses that pay the most of the taxes.
For the vast majority of people, the carbon prices will only apply to fuel imports.
If you or someone you know is experiencing a health crisis, a disability, or a severe illness, you can still get help from the Medicare Disability Support Pension.
But you can’t access it until you’ve completed the Medicare Tax Reduction Scheme.
Is the carbon taxation fair?
If your taxable income is less than $150,000 and your carbon tax surcharge applies to that income, then the carbon revenue will equal your carbon price.
The other two taxes on income that will be levied are the GST and the stamp duty.
But unlike the carbon surcharge, the GST is paid on consumption rather than income.
Why is the Government targeting small businesses?
The Government wants to encourage small businesses to invest in the country’s clean energy and to reduce emissions in the supply chain.
This will be particularly important if the carbon emissions tax is not introduced in time.
Read more: Carbon tax and the future of Australia’s businesses article What happens next?
The carbon levy will go into force in July 2019.
The revenue will then be used for the Climate Change Action Plan, which the Government has proposed to roll out over three years.
Then, in 2020, the Coalition will introduce the Climate Action Plan 2020.
At that time, the tax will be replaced by a levy on emissions, similar to the levy that the Government currently imposes on fuel imports, to help small businesses offset the cost.
As part of that, the Federal Government will introduce legislation that would give businesses tax incentives for the use of renewables and the energy efficiency of buildings.
The carbon taxes and the Climate Actions Plan will be rolled out across Australia in stages.