Queensland foreign-owned companies warn a new State tax will put regional jobs at risk and challenge the viability of their businesses.

Key points: The tax was extended to apply to foreign-owned companies as part of the Queensland Government's 2019—20 Budget

The tax was extended to apply to foreign-owned companies as part of the Queensland Government's 2019—20 Budget Industry warns it may deter foreign investment

Industry warns it may deter foreign investment The State Government is considering relief to affected industries

From this week the land tax absentee surcharge will be increased from 1.5 per cent to 2 per cent and extended to apply to foreign corporations and trustees of foreign trusts.

That is in addition to an increase in land tax for companies and trusts of 0.25 cents for every dollar over $5 million.

The changes were included in the State Government's 2019-20 Budget three weeks ago and are estimated to raise a total of $778 million over the forward estimates.

Belgian-owned Bundaberg Sugar says its land tax bill will more than double as a result of the State tax extension. ( ABC Wide Bay: Nicole Hegarty )

Taxes to hinder investment

Bundaberg Sugar, now owned by Belgian-based Finasucre Group, is one of the companies impacted by the tax that, industry figures say, has largely gone under the radar.

Chief Financial Officer Leone Aslett said Bundaberg Sugar would be paying almost double the tax it did last financial year.

"Last year we paid an increase of 25 per cent of land tax which was about $250,000 and this year they've announced another 10 per cent increase on top of that land tax," she said.

"In 2017–18 we paid just over a $1 million in land tax and this year we'll pay $2.5 million in land tax.

"I wouldn't say it would send us broke but it will certainly hinder further investment."

Associate Professor David Morrison from the University of Queensland's School of Law said increasing taxes could reduce investment.

"I do think that they could [deter foreign investment] because land tax is levied by the State Government and there are differences between states and how they handle land tax," he said.

He said it was possible that an offshore investor might see the land tax changes coming through and, if they were well-funded, look elsewhere for the most welcoming state from a tax point of view.

Fears tax could throttle jobs

Member for Burnett Stephen Bennett says the changes, included in the 2019-20 State Budget, will hit regional areas particularly hard. ( ABC Wide Bay: Nicole Hegarty )

The LNP's State Member for Burnett Stephen Bennett, who represents cane growers in the area, said the changes were likely to deter foreign investment which supports local jobs.

"I really wonder what the future investment looks like and you've got to remember everyone pays. You can not just say that these companies can afford to pay a bit more," he said.

"These taxes will be passed on to the consumer through other taxes and charges or through the price of produce."

A spokesman for the Deputy Premier and Treasurer said the decision to increase the land tax and land tax foreign surcharge was made reluctantly to counter changes in GST allocations and meant Queensland was closer aligned with current measures in News South Wales and Victoria.

"Queensland's land tax rates are amongst the lowest, and the thresholds at which land tax becomes payable are amongst the highest, in Australia," he said.

"Overall, the changes to land tax rates will affect fewer than 5 per cent of Queensland companies and trusts."

Tough times for sugar but potential for relief

Ms Aslett said the tax increase had been introduced at an already challenging time for the industry.

"The sugar industry is very hard hit at the moment with global sugar prices low, electricity prices high and with the crops decline as well it means that we have to pay over about $1.4 million that we just don't have," she said.

"I would think if foreign businesses are trying to invest in Queensland then they get hit with unexpected increases like this it makes you question why investors would be looking to Queensland to do business."

A spokesman for the Deputy Premier and Treasurer said the Office of State Revenue had begun consultation to provide relief to some affected companies.

"The Palaszczuk Government recognises that in some circumstances it would be appropriate to grant foreign companies and trustees of foreign trusts ex gratia relief from the foreign surcharge, as is common in other states" he said.