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Australian court rules higher backpacker tax is discriminatory -Breaking

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© Reuters. FILEPHOTO: This sign was seen in front of Canberra’s High Court of Australia Building, Australia on October 16, 2017. REUTERS/David Gray

MELBOURNE, (Reuters) – Australia’s High Court ruled Wednesday that taxing young workers in Australia at a higher level than the local Australians was discriminatory.

Catherine Addy, a British backpacker who was a Sydney waitress in 2017, brought the case to prove that she was unfairly treated because she is Australian. She had to pay higher taxes than Australians.

Addy stated that her A$26.576 earnings between January 2016 and May 2017 should have allowed her to receive the same tax-free threshold than Australian residents. Instead of paying 15% flat tax, Australian Broadcasting Corp (ABC), reported.

Australians don’t have to pay taxes on their first A$18,000. ($13.548) in earnings.

Australia is bound by an agreement with Britain, Canada and other countries that foreign workers should not pay more tax than the local workforce for similar work.

Addy won the favor of The High Court.

“The tax rate was more onerous for Ms Addy, a national of the United Kingdom, than it was for an Australian national in the same circumstances – doing the same work, earning the same income, under the same ordinary taxation laws,” the judgement said.

In 2017, the so-called “backpacker taxes” were established. It applies to youth on holiday visas, aged between 18 and 31. Their work is in the hospitality, fruit-picking and other industries. This judgement came as Australia was about to open its borders to foreigners.

This case could now be a reason for other backpackers who request an Australian Tax Office review.

According to ABC News, the Australian Tax Office indicated that they were considering the decision.

($1 = 1.3434 Australian dollars)

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