The Flight Centre Travel Group Ltd (ASX: FLT) share price is underperforming on Thursday amid reports a new Queensland tax has worried the company’s boss.

Flight Centre CEO Graham Turner told the Australian Financial Review (AFR) a new levy on large businesses represents “a big blow” to the company.

At the time of writing, the Flight Centre share price is $17.65, 0.9% lower than its previous close.

For context, the broader market is currently in the green. The S&P/ASX 200 Index (ASX: XJO) has lifted 0.27% while the All Ordinaries Index (ASX: XAO) is up 0.1%.

Let’s take a closer look at the new tax that’s reportedly expected to drag on the ASX travel giant’s bottom line.

Flight Centre share price slips as boss slams new tax

The Flight Centre share price is in the red today. Meanwhile, the Brisbane-based company’s boss is said to have slammed a new tax on large businesses.

Turner has reportedly called the levy, designed to fund mental healthcare services in Queensland, “another financial blow”.

“The reality is we … put a lot of effort into [mental health initiatives] already and a lot of money,” Turner said, per the AFR.

The levy was announced alongside the state’s budget on Tuesday.

It will see businesses with payrolls greater than $10 million paying a 2.5 cent levy for every $10 of taxable wages they pay above that level. Businesses with payrolls of more than $100 million will pay an extra levy of 5 cents for every $10 of taxable wages they pay above that figure.

That’s expected to inject an extra $1.64 billion into the state over five years to support mental health and wellbeing and combat substance abuse. Fewer than 6,000 businesses are expected to be impacted by the levy.

Queensland treasurer Cameron Dick commented businesses eligible to pay the tax will also benefit from additional mental health services.

“The productivity gains from additional investment in mental health will dwarf the costs … and larger businesses are well-positioned to reap these productivity rewards,” Dick said, continuing:

Big businesses like large supermarkets and banks have done well out of COVID … and are well placed to chip in to address mental illness.

But Flight Centre hasn’t, in fact, benefited from the pandemic. Turner was quoted as saying:

I’ve got nothing against the coal companies but at least they are doing pretty well at the moment. For us, it’s not great news that’s for sure.

The Flight Centre share price has slipped more than 20% since the company announced its return to profitability in March.

The post Flight Centre share price stumbles amid ‘big blow’ from new tax appeared first on The Motley Fool Australia.

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More reading

• ASX 200 travel shares take off again on Tuesday. Here’s why
• Why are ASX 200 travel shares lifting off on Monday?
• These are the 10 most shorted ASX shares
• Flight Centre share price climbs amid $30m investment in staff
• How did ASX 200 travel shares perform amid today’s sell-off?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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