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Joint review of border fees, charges and taxes

​​​The Government commissioned a joint review of border fees, charges and taxes (Fees Review) prior to the 2015-16 Commonwealth Budget that focussed on identifying where border charging arrangements could be improved to better support future border operations and outcomes for industry.

The Fees Review was led by the Australian Customs and Border Protection Service (ACBPS) and the Department of Immigration and Border Protection (DIBP) and was conducted jointly with the Department of Agriculture given similarities in certain charging arrangements.

The Fees Review has now been finalised and a number of recommendations were put forward for Government consideration as part of the 2015-16 Commonwealth Budget process. Some decisions have been finalised, whilst the Government continues to consider other recommendations. The outcomes, to date, of the Fees Review are detailed below.

Scope

​The Fees Review considered changes to current charges, fees and taxes as well as new approaches to charging in the future. It included charges levied by ACBPS, DIBP and some import related fees and charges applied by the Department of Agriculture.

The Fees Review covered current major charging arrangements at the border, including:

While the Review focused on the major charging arrangements mentioned above, views on current and potential future charges outside these groups were welcomed.

Refer to in-scope fees and charges for a detailed listing including current rates.

A number of other fees, charges and taxes did not form part of the Review, including:

  • Customs Duty (including refunds, Tariff Concessions, Drawbacks), the Goods and Services Tax (GST) and other indirect taxes Customs and Border Protection collects on behalf of Commonwealth
  • fees and charges recovered by the Department of Agriculture for services such as document assessments, inspections, treatments, export certification and post entry quarantine activities.

​​The Department of Agriculture is redesigning its cost recovery arrangements which include fees and charges excluded from within the scope of this Review. Further information is available on the Department of Agriculture’s website.

Visa Application Charges recently underwent changes. This review focussed on examining the outcome of these changes, and identified opportunities for improvements within the current pricing framework.

Consultation

As part of the review process, an Industry Consultation Paper was developed to invite public comment on the Fees Review. A written submission period was held between 17 September and 31 October 2014. This was followed up with industry consultation sessions in Sydney and Melbourne in November 2014. A series of position papers were developed for these sessions which included a number of propositions for possible changes to border fees, charges and taxes.

The formal industry submissions, public comments and industry consultation sessions were all valuable tools in understanding concerns regarding current arrangements, and in exploring innovative ways in which charges could be levied. All submissions were carefully considered and we thank all those who contributed for their valuable feedback.

Before aspects of agreed changes are finalised, we will consult with relevant stakeholders through a range of forums, including media advertisements and face to face consultation.

Outcomes

The Government announced a number of changes to border fees, charges and taxes as part of the 2015-16 Commonwealth Budget, with a number of other proposals still under consideration. Price changes proposed to some of the cost recovery charges will be finalised following consultation which will take place in the coming months. The changes will provide critical funding for improvements in trade, travel and migration facilitation, and will support improved security at Australia’s border. Changes are detailed below.

Import processing charges

To help fund critical cargo and trade related reforms, simplify current arrangements and better reflect similar risk and volume profiles and work effort required in processing.

The following changes, to take effect from 1 January 2016, will be applied to import processing charges (IPCs):

  • A modest increase to the existing rates of IPCs for both electronic and manual lodgements with the exception of sea cargo consignments of $10,000 or more for declarations lodged electronically. This will contribute $106.4 million over four years to the proposed reform initiatives of more than $250.0 million.
  • Alignment of charges across air, post and sea cargo. This will better reflect the similarities in risk and volume profiles across the pathways and improve the consistency of cost sharing associated with processing imports.
  • The introduction of a consistent price differential between electronically and manually lodged declarations to reflect the additional work required to manually enter and process these documents.

A fact sheet with further information on the changes to IPCs is available.

​Licensing

We have three licence types of whose charges are currently misaligned. The Fees Review identified ways in which charges can be aligned across all licence types, including:

  • The introduction of an application charge for broker and warehouse licences, with a commensurate reduction in the licence grant fee for warehouse licences. This will reduce the cost burden on the current licensing program, by charging all applicants, regardless of the application process.
  • The introduction of a variation charge for warehouse licences.

In addition, as charges imposed on brokers do not recover adequate revenue to match the costs of delivery of the licensing program, there will be a modest increase to existing Broker licence charges. These increases will continue to only partially recover the costs associated in the administration of the licensing program to not present an impost to brokers.

The changes will come in to effect from 1 January 2016.

A fact sheet with further information on the changes to licensing arrangements is available.

Updated information regarding the implementation of the changes to licence charges is available within Australian Customs Notice 2015/37 (84KB PDF).

Passenger Movement Charge

In keeping with its election commitment, the Government decided not to increase the Passenger Movement Charge.

Charging for in-demand border services

This proposal is still under Government consideration. With the Department of Agriculture, we continue to identify ways in which we can work with industry to deliver in demand border services, such as premium passenger clearance services, additional automated primary processing capabilities (SmartGate) and border agency clearances to industry members.

Visa application charges

Visa Application Charges (VACs) will undergo two major changes as part of the Fees Review. These are harmonisation of charges, and targeted increases.

Harmonisation will occur where a price differential currently exists for lodging an application for a visa subclass between onshore and offshore to the higher onshore charge. The only exception is for child VACs in these circumstances where the charge will be harmonised to the lower price. This will simplify the charge structure by consolidation of charging points inherent within the current visa charging framework.

Targeted increases take into account demand pressures, international competitiveness, sector sensitivities, recent price increases, and the potential impact of broader policy reform initiatives. The following targeted price increases will apply from 1 July 2015:

  • an inflation price (2.3 per cent) increase to visas which face strong international competition or are impacted by recent significant price increases
  • a 5 per cent price increase to visas which continue to see strong demand despite previous VAC changes, or are likely to see a sustained volume increase through policy changes under consideration
  • a 10 per cent price increase to Other Family (Remaining Relative, Carer and Aged Dependent Relative) visas and (non-contributory) Parent visas as the underlying demand is not impacted by the price increase
  • a 50 per cent increase to Significant Investor Visa (SIV) stream in the permanent migration Skill stream category, as the VAC is a very small component of the minimum $5 million of investments required under the visa regulation.

​Citizenship charges

To maintain current service levels in the citizenship area, given the increasing pressures on other parts of Government, prices relating to obtaining Australian citizenship will shift from partial cost recovery to full cost recovery. Prices will be increased from 1 January 2016.

A fact sheet with further information on the changes is available.

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