The Federal Government needs to abolish the Luxury Car Tax (LCT) rather than use it as an ill-conceived money grab, says the Federal Chamber of Automotive Industries (FCAI).
The LCT was originally created as a means of protecting Australia’s local vehicle manufacturing industry, the FCAI explains.
Local manufacturing in Australia finished in 2017, which makes LCT redundant, and it should be scrapped, the organisation says.
“It’s now just a handbrake on the industry bringing the best fuel efficiency and safety technologies to Australian consumers.”
FCAI chief executive Tony Weber says at a time when Australians are being encourages to buy low emission vehicles, the government is putting a greater tax on them.
“The LCT penalises Australian consumers, as it imposes unnecessary additional taxes on many low emission technology vehicles,” he explains.
“The changes announced in the Mid Year Economic and Fiscal Outlook (MYEFO) slug Australians with more taxes and make vehicles less affordable.
“The change to indexation is just another cynical revenue grabbing exercise,” Weber adds.
“If the Australian Government wants to modernise the LCT, they should remove it as part of true tax reform for the transport sector including consideration of a road user charge.
“Australians need real tax reform, rather than tinkering at the edges.”
