A FIRE tax will be fairer than the current system which exempts people without home insurance from funding fire and emergency services.

The proposed tax could see all homeowners and landowners billed to fund the Rural Fire Service, NSW Fire & Rescue and the SES.

But volunteer firefighters claim the proposed tax would see funding for emergency services fall as community donations dried up. Under one model, a household with a land value of $250,000 would be charged $267 annually.

The government's funding overhaul would replace the current system under which households that have taken out insurance pay a levy added onto their insurance premium.

Emergency Services Minister Mike Gallacher said on Sunday it was unfair that people who did not have home insurance were not contributing to the funding of the RFS, the states's fire brigade and the SES.

"We haven't committed to an amount, it's the process and the principle in terms of a levy that people within government believe is worthwhile,'' he told ABC Radio.

Mr Gallacher said the government had yet to finalise its decision on the proposed levy but extensive consultations had been held and many submissions received, which would be gone through early this year.

He said there would be a chance for public discussion on the proposal.

All other states had moved towards or had introduced such levies, the minister said.

NSW Fire Service Association President Brian McKinley says a tax-based funding system will lead to a reduced firefighting budget because people will stop donating when they think they are already paying through a tax.

Read more on The Daily Telegraph.