New Luxury Car Tax Slammed by Industry
In a move that has outraged industry leaders, the Victorian government budget, planned to be released on Monday 3rd June, is rumoured to contain a new hit on car buyers with a planned luxury car tax.Leaked budget details this week suggest that up to $260 million will be recouped from buyers of vehicles priced at more than $100,000. The move has been slammed as a “tax on a tax on a tax” by Australian Automotive Dealer Association CEO David Blackhall.
A Tax on Safety
The Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber has said “[it] is money grabbing at its worst” and highlighted that it is a “tax on safety and technology” with more innovative vehicles being hit hardest. Weber went on to say that “the vehicle which attracts the most LCT is a Toyota Landcruiser – a popular vehicle for families and landholders. Hardly a luxury vehicle,”
Existing Luxury Car Tax
The Australian Government already levies a 33% tax on vehicles above the Luxury Car Tax threshold of AUD$66,331 and that tax is calculated on the total vehicle tax included the GST(VAT). While full details of the new tax are yet to be released, it does appear that it will be charged on the total cost including other taxes. The existing tax adds about $2100 to the price of an $80,000 car and has been specifically target in free trade negotiations with the EU. Audi Australia boss Paul Sansom has previously said that the tax is “definitely part of the discussion in government with the FTA with Europe" and Communication Head at Mercedes, David McCarthy has said that EU manufacturers have made their position very clear: “if you want a free trade agreement with EU it has to go.”
Article authored by Shane Curran