Banner image for Media Releases

Media Releases

Industry Throws Its Support Behind Call for Abolishing Tariffs and Lct

The Federal Chamber of Automotive Industries (FCAI) has thrown its support behind the South Australian Treasurer’s call today (December 2) to abolish vehicle tariffs and remove the inequitable Luxury Car Tax.

South Australian Treasurer Tom Koutsantonis announced that he would take his call for the abolition of tariffs to the COAG meeting of Treasurers in Canberra today, as from the end of 2017 there will no longer be a local manufacturing industry for the tax to protect.

FCAI Chief Executive Tony Weber said that it was time this issue came back on the Federal government agenda as both taxes artificially suppress the affordability of new vehicle technologies. 

“The Luxury Car Tax, in particular, acts as a device to artificially inflate the price of vehicles offering the latest in safety and emission technologies,” Mr Weber said. 

“The LCT is imposed at what can only be described as an arbitrary price level and doesn’t even pass the fairness test. Why is this tax imposed on the car industry when a raft of other luxury goods don’t get taxed the same way?” 

Mr Weber agreed with the SA Treasurer’s view that with the cessation of volume local vehicle manufacturing 12 months from now, an import tax on vehicles would be no longer necessary.

“The Australian new vehicle market is one of the most competitive in the world. Reducing tariffs and taxes provides manufacturers with further opportunity to bring their new technologies to market at even more affordable prices,” he said.

“Artificial market mechanisms like the LCT have a stifling effect on the flow-through of important technologies like automated and electric vehicles. 

“What we’re seeing now is a growing public awareness of the huge benefits that these technologies can offer us, and it’s refreshing to see calls for a review of inequitable taxes and charges like the LCT.”