Easing of Oz Luxury-Car Tax Doesn’t Appease Toyota

Toyota Australia renews its call to abolish the federal luxury-car tax even as the Australian Tax Office raises the threshold it applies to new-vehicle purchases.

The threshold at which luxury cars will be subject to the tax will increase by A$1,667 ($1,707) as of July 1, from A$57,466 ($58,873) to A$59,133 ($60,569). Buyers pay the tax on the amount of the price above the threshold.

Originally set at 25%, the tax was increased to 33% in 2008.

Toyota Australia Sales and Marketing Executive Director Matthew Callachor says although the increase provides some relief for new-car buyers the luxury-car tax still is an inefficient, punitive and poorly designed measure.

“It is discriminatory because it applies only to vehicles, and the arbitrary threshold is not set at a level that most people would consider a luxury car,” he says in a statement.

“Not only that, it is a tax on a tax. Motorists already have to pay (a) 10% goods and services tax, stamp duty and registration fees when buying a new car, as well as a hefty tax on (gasoline).

"Even with the latest threshold adjustment, this unfair tax has not been consistent with inflation since it was introduced in 2000.”

Toyota Australia says the higher threshold will result in a A$500 ($512) cut in the price of 20 Toyota models, and the savings will be passed on to customers. The reduction covers all seven LandCruiser 200 series models, nine LandCruiser Prado variants, two Kluger SUVs and two Tarago people movers.

In addition, the 5-door automatic GX Prado turbodiesel is priced below the new threshold, resulting in a saving of A$236 ($242).