Good news on the tax front for backpackers heading to Australia

This should ensure a few more dollary-dos in the pocket.

Backpackers working in Australia will be relieved to learn that plans to introduce a 32.5% tax on working holidaymakers have been scrapped by the Australian government. Instead, according to the BBC, working holidaymakers will face a 19% tax on every dollar they earn in the country, having previously not had to pay any tax, like other workers in Australia, until their annual earnings exceeded AUS$18,200 (approximately €12,440). Plans to introduce a 32.5% tax for backpackers were met with opposition from farmers in Australia, who rely on working holidaymakers for seasonal labour throughout the year. Backpackers make up 25 per cent of the farm workforce each year, while in the Northern Territory, for example, they represent 85 per cent of farm labourers. The move was also opposed by the tourism industry, who felt that such a prohibitive tax may dissuade overseas visitors from travelling to the country; it is estimated that approximately 600,000 backpackers travel Down Under every year. The tax on working holidaymakers, which was initially proposed as part of the 2015 budget, was expected to bring in up to AUS$500 million and the shortfall brought about by the reduction in the tax rate will be made up by a $5 increase in tax on passengers leaving the country. In a further boost to backpackers, meanwhile, the cost of working holiday visa applications in Australia will be reduced by AUS$50 to A$390 (approximately €265).