A British backpacker who spent her time in Australia as a waiter in Sydney has won a case against the government-imposed “backpacker’s tax”.

The highest court of Australia ruled in favour of Catherine Addy on Wednesday as the tax was found to be discriminatory.

“Backpacker’s tax” started in 2017, under which the government levy a flat 15 per cent tax on every dollar that is earned by two categories of working holiday visas, which are linked to seasonal labour.

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Calling it a “disguised form of discrimination”, two years ago, a Brisbane court had ruled that Addy should not be asked to pay the “backpacker’s tax” because of the double taxation treaty between Australia and Addy’s home country, the UK.

However, this was overturned by the Federal Court which ruled in favour of the Australian Taxation Office. Addy’s lawyers then appealed to the top court of Australia.

“An Australian national deriving taxable income from the same source during the same period would have been taxed at a lower rate,” the High Court ruled on Wednesday. “The more burdensome taxation was imposed on Ms Addy owing to her nationality.”

Addy argued that that if she earns $26,576, she would have been hit with $3,986, which is way higher in comparison with an Australian citizen who would have had to pay $1,591.

“When the position of Ms Addy is compared with that of an Australian national, as it must be, that is the only conclusion which may be drawn,” the five justices of the high court said. “She did the same kind of work and earned the same amount of income from the same source; yet an Australian national was required … to pay less tax.”

However, officials of the Australian Taxation Office said that this decision is only relevant for holiday-makers who are “both an Australian resident for tax purposes” or from one of the eight countries with similar tax treaties. “Most working holiday makers will be non-residents as they are in Australia to have a holiday and working to support that holiday,” it said in a statement. “This decision will not change the tax rates for the majority of working holiday makers.”