The Minister for Agriculture and Northern Australia, David Littleproud, and Assistant Treasurer and Minister for Housing, Homelessness, Social and Community Housing, Michael Sukkar on Monday (21 March) announced the government will apply concessional tax treatment to primary producers that generate revenue from the sale of Australian carbon credit units (ACCUs) and biodiversity certificates.
This will encourage carbon abatement activities and help Australia deliver on its net-zero emissions target by 2050.
Under the new tax regime, farmers will treat revenue from the sale of ACCUs as primary production income, providing access to income tax averaging arrangements and the farm management deposit scheme.
Revenue from ACCUs will be recognised in the year of sale to support cash flow. The treatment of biodiversity certificates will be aligned with the new tax regime for ACCUs.
Mr Littleproud, said the arrangements will further encourage carbon abatement and biodiversity activities, while providing primary producers with a diversified source of on-farm income.
“We want to give genuine farmers more options when deciding to hold or sell their credits – whether for investment purposes or to enhance the environmental credentials of their operations – without being penalised,” Mr Littleproud said.
“This is removing barriers for farmers who want to do the right thing by their farm and the changes are expected to deliver $100 million to their bottom line over the next four years.”
Mr Taylor said the changes would encourage more farmers to take part in the Emissions Reduction Fund and earn revenue from ERF projects.
“The new tax changes mean farmers will get an even greater benefit from the income they earn selling Australian Carbon Credit Units,” he said.
