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Australian government may scrap backpacker tax

It seems that the Australian government is going to throw out its plans to bring in a backpacker tax for tourists who travel to the country.

The tourism industry hit out against the suggestion and plans for the tax, saying that it would be detrimental to Australia's flourishing economy in this area, reports the BBC.

People who were going to be liable to pay tax were tourists who were working in the country on holiday visas and were going to be excluded from the country's tax-free threshold from 1st July this year.

With this in place, tourists would be charged 32.5 per cent tax on every dollar that they earned in Australia.

Understandably, the tourism and farming sectors were directly opposed to this tax, as they rely on temporary workers for their staff and have been lobbying against the changes.

They have been worried that by the government bringing in this tax, tourists would choose instead to go to work and travel in New Zealand and Canada.

Fears that this would affect the amount of tourists coming to Australia were already being realised, as applications for working holiday visas in the country had already begun to shrink with the press publicising the potential plans.

The amount had dropped by five per cent, which is substantial considering that during the 2014 to 2015 season, Australia granted 214,830 working holiday visas to travellers.

However, the tax is, so far, being deferred for the next six months while the government decides if the plans would work long-term.

Kelly O'Dwyer, assistant treasurer, said: "I can tell you with great certainty that this is very good news for rural and regional communities; it's good news for our tourism sector; and it's good news for working holiday makers."

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