VACC Applauds Potential Elimination of Luxury Vehicle Tax
6 May 2025
MELBOURNE - The Victorian Automotive Chamber of Commerce (VACC)
enthusiastically endorses the Federal Government's plans to potentially scrap
the $5.2 billion luxury vehicle tax (LVT) as negotiations progress toward a
European Union free trade agreement.
The contemplated elimination of this 33% impost on vehicles valued
above $91,387 for fuel-efficient models and $80,567 for standard vehicles would
provide substantial advantages to Victorian motorists and automotive
enterprises.
"This outdated levy has been a significant burden on Victorian
consumers and businesses for far too long," stated Peter Jones, CEO of
VACC. "It's abolition would substantially decrease vehicle acquisition
costs while bolstering Victoria's 5,000-plus automotive enterprises during this
crucial industry evolution phase."
The VACC identifies abolishing this tax as improving accessibility to
advanced vehicles with better safety and environmental features, strengthening
Victorian retailers' market position, broadening consumer choice, and
supporting employment across the state's automotive networks.
"Removing this tax presents a pivotal opportunity to reform
Australia's automotive taxation structure. This would be an enormous win for
Victorian consumers, who have effectively been double taxed since the
introduction of the Super Luxury Duty in Victoria in 2019," Mr Jones said.
"The elimination of this burden would not only provide immediate
relief to Victorian motorists but also establish a foundation for a more
equitable and streamlined automotive tax framework nationwide."
"VACC has consistently advocated for the abolition of the Luxury
Car Tax since it has outlived its original purpose," said Mr. Jones.
"With Australian passenger vehicle manufacturing now relocated offshore,
this tax has become a relic of a different era. It's time for our taxation
system to reflect current market realities rather than continuing to burden
consumers with a tax that was designed to protect an industry that no longer
exists in Australia."
The VACC anticipates ongoing dialogue with government officials as
Victoria's automotive sector navigates this transformation period, with
particular emphasis on electric mobility adoption and charging infrastructure
development across the state.
"Our organisation stands prepared to engage productively with the
Albanese Government to ensure that policy reforms such as dismantling the
luxury vehicle tax maximise benefits for Victorian consumers and businesses
while underpinning our industry's sustainable pathway forward," added Mr
Jones.
ENDS
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About VACC
Founded in
1918, the Victorian Automotive Chamber of Commerce (VACC) represents over 5000
businesses in Victoria and Tasmania who employ more than 50,000 people. Member
businesses range from new and used vehicle dealers, repairers, vehicle
servicing, parts and component wholesale/retail and distribution and
aftermarket manufacture, tyre dealers and automotive dismantlers and recyclers.
VACC
develops the future workforce, employing 560 apprentices and trainees through
its group apprenticeship scheme, and maintains memberships with the Motor
Trades Association of Australia and Australian Chamber of Commerce and Industry
and contributes to the national policy debate through these leading industry
associations.