While activists spread misinformation and false and flawed comparisons, Australia’s gas industry gets on with the job of supporting energy security and driving economic growth.
Myth
Japan collects more tax on Australian gas than the Australian Government does.
Fact
Australia’s oil-and-gas industry paid nearly $22 billion in taxes and royalties to Federal and State governments in 2024-25.
Gas is a major driver of economic activity in Australia
The Australian gas industry plays a critical role. Its operations underpin domestic and regional energy security and decarbonisation, and drive enormous economic activity in Australia.
This includes supporting more than 200,000 jobs across the country and contributing tens of billions of dollars each year in taxes and royalties to Federal and State Governments.
Despite this, activist organisations such as the Australia Institute continue to make unfounded claims that the industry is not paying its way. Its latest allegation – that the Government of Japan collects more tax on Australian gas than the Australian Government – is false and misleading.
Not a valid comparison between taxes
Japan’s Petroleum and Coal Tax is a broad-based, consumption-style levy paid by Japanese importers and ultimately by end users in Japan. The tax which the Australian Institute seeks to compare it to – the Petroleum Resource Rent Tax (PRRT) – is designed to capture super profits from Australian projects after capital recovery.
They are not alike and it makes no sense to compare them.
If the Japanese tax was to be compared to anything in Australia, it would be the fuel excise tax – which the Australian Government levies on petrol, diesel and other refined petroleum products. Nearly all of this fuel is refined overseas and imported into Australia.
The Australian fuel excise tax collected $18.8 billion in 2021-22, far more than the $700 million that the Australia Institute suggests the Government of Japan collects from Australian LNG annually.
Australia does not miss or lose revenue because of Japan’s Petroleum and Coal Tax, which is used to fund Japanese energy security, Japanese emissions reduction programs, and Japanese consumer support.
How much tax does the Australian Government collect on gas?
In its flawed analysis, the Australia Institute conveniently overlooks the enormous contribution made by the Australian gas industry to Federal and State revenue. Aside from PRRT, Australian gas producers pay corporate income tax, payroll tax, GST, fringe benefits tax and, where applicable, state royalties.
The Australian Taxation office confirmed in 2025 that:
“…the total paid by the oil and gas sector for 2023–24 [is] $10.4 billion.”1
Australian Energy Producers, which tracks up-to-date data on payments to both Federal and State governments, reported that:
“The oil and gas industry is one of the biggest tax-paying sectors in Australia, contributing $21.9 billion in taxes and royalties in 2024–25.”
These payments are more than 12 times the size of Japan’s Petroleum and Coal Tax yet not included in the Australia Institute’s report.
And the Australian gas industry’s contribution to tax revenue is set to grow even further.
Research by Wood Mackenzie, undertaken for Australian Energy Producers, forecasts the oil and gas sector would pay almost $160 billion in taxes and royalties to governments over the next five years if high international oil prices persist. The analysis shows that the PRRT would have the biggest single uplift, with a 70 per cent increase in oil prices almost trebling revenue from $13.5 billion to $38.9 billion over five years.
This reflects the PRRT operating as designed and shows yet again that a successful oil and gas industry is in the best interest of all Australians.
Sourced from the Australian Taxation Office’s Corporate Transparency Report 2023-24: https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/large-business/in-detail/tax-transparency/corporate-tax-transparency-report-2023-24/introduction-for-corporate-tax-transparency-report-2023-24
