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FCAI Deplores Victorian Government’s Suggestion of Luxury Car Tax on Vehicles

The Federal Chamber of Automotive Industries (FCAI) has spoken out strongly against reports the Victorian State Government is set to implement a Luxury Car Tax (LCT) on vehicles over $100,000.

“It is money grabbing at its worst,” said Tony Weber, chief executive of the FCAI.

“But what’s more disturbing is that it is a tax on safety and technology.  It targets vehicles that introduce innovative safety and technical features to the market.

“And the vehicle which attracts the most LCT is a Toyota Landcruiser – a popular vehicle for families and landholders.  Hardly a luxury vehicle,” Mr Weber said.

The Luxury Car Tax was originally implemented as a means of assisting Australia’s local vehicle manufacturing industry.  Local manufacturing in Australia finished in 2017, which makes LCT redundant.  Importantly, an Australian LCT could stand in the way of the development of a European Free Trade Agreement.  

“The fact that States and Territories are now considering and implementing this tax is beyond rational belief,” Mr Weber said.

For reference - Previous quotes from Tony Weber on LCT:

“Generally accepted guiding principles of a “good” tax system include neutrality, equity, fairness, and simplicity – and the LCT meets none of these. The LCT has become redundant in the Australian automotive market and the time has come to cease the charade that this is a justifiable, sensible or even a necessary tax.

“The LCT actually penalises Australian consumers as it imposes unnecessary additional taxes on many vehicles which can in no way be described as luxury. The majority of people who pay the tax are average Australians who buy vehicles well under $100,000 to transport their families. 

“The EU regards it as a false tariff and there is no doubt that it is a tax on technology and safety, preventing consumers from accessing the newest and safest vehicles. 

“The FCAI fully supports a considered withdrawal from the Luxury Car Tax.  A graduated reduction of the tax over an agreed period, such as five years, could see the government end this inequitable taxation in a structured and responsible manner.”

For more information contact:

Lenore Fletcher
Director Communications and Emerging Technologies
0408 320 797