EU wants luxury car tax to be trade deal
The chamber wants the luxury car tax to be scrapped either as part of the free trade deal or as part of a “side deal” between the bloc and Australia.
“In its current form, the [luxury car tax] is neither effective nor easy to administer. We believe it has no economic merit,” Rose said.
Federal Chamber of Automotive Industries chief executive Tony Weber said scrapping the levy would give Australia more bargaining power, opening up opportunities for sectors such as agriculture to gain better access to the European market.
“With a little vision we can have a win-win scenario where Australian motorists are better off, Australian farmers are better off and we have a higher GDP in Australia and a higher GDP in Europe,” he said. -he declares.
The luxury car tax does not only apply to European manufacturers. Weber noted that Toyota owners were the biggest tax payers due to more expensive vehicles such as the LandCruiser.
However, European manufacturers also face a 5% tariff on their vehicles, unlike automakers in countries like Japan, Korea and the United States with which Australia has free trade agreements. .
A German-made BMW iX electric SUV has a base price of almost $113,000, which includes the 5% manufacturer-paid tariff of around $5,000 to $6,000, and Australian buyers then have to add approximately $12,000 GST. After the GST is counted, nearly $14,500 in luxury car tax is added, bringing the total to about $139,500, before stamp duty and registration.
In contrast, the Korean-made Genesis GV60 starts at around $99,400 including GST and doesn’t come with a 5% tariff. The luxury car tax for this electric SUV is around $5,200, bringing its price to around $104,600 before stamp duty and registration.
Rose said the luxury car tax was an “additional deterrent” to greater adoption of electric vehicles in Australia, given that there were family-sized electric vehicles priced above the threshold.
A government move to offer new incentives for emission-efficient vehicles by waiving tariffs on cars worth less than $85,000 faces a fight from the central bank and the Coalition on the estimated $4.5 billion cost of the program over 10 years.
Rose said the chamber is closely monitoring developments.
”[We] believe that a range of support measures are appropriate to achieve greater adoption of electric vehicles in Australia,” she said. “It will also encourage German and other automakers to offer a wider range of electric vehicles to Australian car buyers.”
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