The Petroleum Revenue Act 1985
allows the Australian Government to waive excise on particular onshore projects. To do this, the state or territory, with the agreement of the production licensee, must introduce a Resource Rent Royalty (RRR) for that project, and make a revenue sharing agreement with the Australian Government. Currently, the resource rent royalty is only applied to production from Barrow Island, WA.
RRR is similar to the Petroleum Resource Rent Tax (PRRT) except that:
- exploration deductions are limited to the year preceding the introduction of RRR
- revenue is shared according to a formula in the Act, whereas PRRT is not shared
- for Barrow Island, RRR is shared between the Australian Government and Western Australia in the ratio 75:25.