Canberra GP clinics contacted by ACT Revenue to pay payroll tax, RACGP president Dr Nicole Higgins says

General practice clinics have been receiving calls asking for payroll tax backpay, Dr Nicole Higgins said.

This comes as more than 70 general practitioners gathered at Parliament House to discuss issues facing the sector with ACT independent Senator David Pocock.

It is more expensive to see a GP in Canberra than any other capital city, or state and territory. Two of the top five most expensive electorates are in the ACT.

The college is calling for the ACT government to exempt general practitioners from payroll tax.

Payroll tax is present in every state and territory, and charges employers paying more than $2 million a year 6.85 per cent of wages.

More GPs will close down if payroll tax is imposed on clinics, president elect of the Australian Medical Association ACT branch Dr Kerrie Aust said.

"The state of general practice in Canberra is quite tenuous, and we know that the financial viability of many practices is very, very close to the line," she said.

"The introduction of payroll tax is essentially going to be a tax on the sick and will probably lead to further general practice closures."

Up until a recent decision by the NSW Supreme Court, general practitioners - who work as contractors - have not been asked to pay the tax, Dr Higgins said.

Doctors are contractors and pay a portion of their earnings to practices instead of earning a wage.

"RACGP has been informed by many practices within the ACT that they have been contacted by the revenue office [for backpay]," Dr Higgins said.

"It will put an extra $15 per consultation just to be able to cover that extra tax."

Opposition health spokesperson Leanne Castley said the Chief Minister should exempt medical practices from this increase in payroll tax.

"Primary care is a crucial service for sick Canberrans, and it is atrocious that the ACT Revenue office is contacting practices telling them that their costs are increasing," she said.

A challenge in the NSW Supreme Court by large medical operator Thomas and Naaz was rejected on March 3. The decision is being appealed.

Payroll taxes will be passed on to patients, Garema Place Surgery practice principal Dr Felicity Donaghy said.

"General practices operate on a margin of about 5 per cent," she said.

"We have tried very hard over the last three or four years to not increase our costs ... but if this tax were applied to us, we would have no choice but to pass that cost on."

The clinic is only one of two operating in the Canberra city.

The Queensland government has offered clinics a tax amnesty until June 30, 2025.

The government does not intend to amend payroll tax rules, ACT Health Minister Rachel Stephen-Smith said.

"The payroll tax rules are quite clear and we don't have any intention of amending those," she said.

"We understand that GPs are under significant pressure in this country, and that's a national issue.

"But asking states and territories to wear the cost by exempting a particular group of professionals from payroll tax is something we're not considering at this point.

"I understand that Queensland has made some changes but they are the only jurisdiction to have done so to date. The ACT government has a payroll tax threshold that is higher than any other jurisdiction."

An ACT government spokesperson said the ACT Revenue Office regularly talks to businesses about how tax laws operate.

"The payroll tax laws applying to payments to employees and contractors have not changed," the spokesperson said.

"Whether payments to doctors are subject to payroll tax will depend on the facts and circumstances of each arrangement. Payroll tax applies equally to all industries in the ACT."

On Tuesday, more than 70 Canberra GPs gathered for a forum with Senator Pocock at Parliament House to discuss issues facing the profession.

The ACT's bulk billing rate of five per cent is the lowest in the country.

Hobart Place GP in the city will be closing soon, with practice manager Dr Clara Soo saying it was not financially viable to remain open.

Watson-based GP Dr Gillian Riley said more general practices in Canberra would close.

"The margins are getting tighter, we're not immune to inflation. Costs are high. This is Canberra, rents are high here, cost of living is high here, we're not immune to that," she said.

"We don't want this to happen, but the reality that we're faced with at the moment is we charge bigger gaps to people we know can't afford them or we go broke. The moral injury is extreme at the moment, it's pretty awful."

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Senator Pocock said regional incentives meant it was more attractive for GPs to live in Murrumbateman than Canberra.

"[The federal government] should start by looking at how their regional incentives are impacting the ACT," he said.

"For a GP, it's actually far more attractive to live in or commute to Murrumbateman, given the federal government will pay off a chunk of your HECS debt and provide you with higher cash incentives."

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