AMA slams proposal to tax rural scholarships

Hundreds of medical students on bonded scholarships will face tax demands under revenue-raising plans floated by the Australian Tax Office (ATO).

Medical Rural Bonded Scholarships, worth some $26,300 a year, are offered to medical students who pledge to work in rural and remote areas for up to six years after they graduate.

Historically, they have been treated as tax-free.

But in a new discussion paper, the ATO argues that government scholarships designed to tackle workforce issues rather than supporting explicit educational needs should be subject to tax.

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