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Archaic Luxury Car Tax needs to be abolished

The Federal Chamber of Automotive Industries (FCAI) calls on the Federal Government to abolish the Luxury Car Tax (LCT) rather than use it as an ill-conceived money grab.

The LCT was originally created as a means of protecting Australia’s local vehicle manufacturing industry.

Local manufacturing in Australia finished in 2017, which makes LCT redundant, and it should be scrapped. 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, said at a time when we are encouraging Australians 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,” Mr Weber said.

“The changes announced today in MYEFO slug Australians with more taxes and make vehicles less affordable. The change to indexation is just another cynical revenue grabbing exercise.

“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.”