The Motor Trades Association of Australia (MTAA) strongly supports the Australian Government's consideration of abolishing the $5.2 billion luxury car tax (LCT) as part of negotiations for a free trade agreement with the European Union.
The proposed removal of the 33 per cent tax on vehicles above the thresholds of $91,387 for fuel-efficient vehicles and $80,567 for other vehicles would benefit Australian consumers and automotive businesses significantly.
"The luxury car tax has long been outdated and inefficient, unfairly impacting Australian motorists and businesses," interim executive director of the MTAA, Rod Camm, said.
"Its removal would help reduce vehicle costs for consumers whilst supporting thousands of automotive businesses across the country during a critical period of industry transformation."
The MTAA believes abolishing the LCT would deliver multiple benefits to the Australian automotive sector, including:
- Increased affordability of newer, safer, and more environmentally friendly vehicles
- Enhanced competitiveness for Australian automotive retailers
- Expanded consumer choice in the Australian market
- Support for employment across sales, service, repair, and parts sectors
"The potential removal of this tax represents a significant opportunity to modernise Australia's automotive taxation framework at a time when our industry is undergoing unprecedented technological and structural change," Camm said.
The MTAA says it is looking forward to continued collaboration with the government as the industry navigates this transition period, particularly regarding electric vehicle adoption and supporting infrastructure development.
"We stand ready to work constructively with the Albanese Government to ensure that reforms like the abolition of the luxury car tax deliver maximum benefit to Australian consumers and businesses whilst supporting the industry's sustainable future," Camm said.