People living in major regional centres including Darwin, Townsville, Cairns and Mackay could lose tax breaks paid to compensate for living in remote areas with “uncongenial climates” after a Productivity Commission review was launched this week.

Left all but untouched since the 1940s, the zone tax offset and remote area tax concessions are paid to individuals and businesses in defined zones covering about three-quarters of the country, including large parts of Western Australia, South Australia, the Northern Territory and Queensland.

In 2016-17, about 500,000 Australians or 3 per cent of all taxpayers claimed the zone tax offset – including 75 per cent of taxpayers in the NT.

The government ordered a review to see if the tax breaks remain fair and contemporary, raising the prospect some of the largest groups of claimants could be removed from the scheme.

The review is expected to report to the government by February 2020.

Source: www.afr.com