Australian Car Manufacturing Industry
No form of tax is ever embraced heartily. But Australia's application of the luxury car tax has made the government unpopular with both manufacturers and consumers.
Australian Car Manufacturing Industry
Australia's LCT And Its Impact On Car Prices
By Janus Onbekend
The Australian Taxation Office says that for 2011-2012, the Luxury Car Tax threshold is $75,375 for fuel-efficient cars and $57,466 for other cars. One must both be registered for GST and sell a luxury car with a GST-inclusive value above the LCT threshold. This would include retailers, wholesalers, manufacturers and other business that sell cars. Importers of luxury cars may also have to pay LCT, even for those who privately buy a car in Australia.
The Luxury Car Tax has been hugely unpopular in Australia. Manufacturers from Toyota to Mercedes have complained that it is discriminatory and ill-thought. Half of all vehicles subject to the LCT were imported from the EU and it is noteworthy that people who buy a car in Australia are the only ones still subject to a luxury tax. And figures quoted for 2010 sales by Toyota show that based on the LCT, the top two "luxury cars" in Australia were the Toyota Prado and Land Cruiser. It takes quite a stretch of the imagination to consider these outback work vehicles as luxury cars. On the other hand, Mercedes announced in the first quarter of 2012 that some variants of its C-Class models were classified as fuel-efficient cars, and so slipped under the LCT classification. As a result these particular variants are now being sold $3,000 cheaper. And to show how farcical the LCT can be, Porsche showed that its cars could slip under the LCT threshold if the manufacturer use tires for fuel-efficient hybrids in its cars.
Higher rates of sales taxes for true luxury items like boats, jewellery, furs, watches and even televisions ceased to be imposed as of the year 2000. So, the Luxury Car Tax is being seen as just an attempt to save the country's automobile manufacturing industry, which has seen continuous decline with the influx of cheaper and more fuel-efficient cars. In fact, manufacturers based in the European Union have formally complained to the European Union Commission that the LCT is an import tariff substitute, resulting in uneven pricing and artificial restrictions in the luxury car segment. As of 2011, the LCT was still a subject of trade talks and has not been resolved to the automotive manufacturers' satisfaction.
While $57,000 may seem like a luxury price when you buy a car in Australia, users of four-wheel drive and special vehicles (such as those for the disabled) are forced to pay the LCT even when the vehicles they purchase aren't luxury vehicles at all. The fact is that in 2011, the LCT applied to 14 percent of vehicles sold new. When it was first introduced, the Luxury Car Tax was applicable to only 3 percent of new cars sold. Clearly, the LCT has to be reconsidered. People who buy a cars in Australia are already paying one of the highest prices in the world, and together with other costs of living contribute to the reputation that the country is an expensive place to live in.
Visit our site if you're wondering how to sell my car for free. Our sister site also allows you to sell or buy quality spare car parts.
By Janus Onbekend
The Australian Taxation Office says that for 2011-2012, the Luxury Car Tax threshold is $75,375 for fuel-efficient cars and $57,466 for other cars. One must both be registered for GST and sell a luxury car with a GST-inclusive value above the LCT threshold. This would include retailers, wholesalers, manufacturers and other business that sell cars. Importers of luxury cars may also have to pay LCT, even for those who privately buy a car in Australia.
The Luxury Car Tax has been hugely unpopular in Australia. Manufacturers from Toyota to Mercedes have complained that it is discriminatory and ill-thought. Half of all vehicles subject to the LCT were imported from the EU and it is noteworthy that people who buy a car in Australia are the only ones still subject to a luxury tax. And figures quoted for 2010 sales by Toyota show that based on the LCT, the top two "luxury cars" in Australia were the Toyota Prado and Land Cruiser. It takes quite a stretch of the imagination to consider these outback work vehicles as luxury cars. On the other hand, Mercedes announced in the first quarter of 2012 that some variants of its C-Class models were classified as fuel-efficient cars, and so slipped under the LCT classification. As a result these particular variants are now being sold $3,000 cheaper. And to show how farcical the LCT can be, Porsche showed that its cars could slip under the LCT threshold if the manufacturer use tires for fuel-efficient hybrids in its cars.
Higher rates of sales taxes for true luxury items like boats, jewellery, furs, watches and even televisions ceased to be imposed as of the year 2000. So, the Luxury Car Tax is being seen as just an attempt to save the country's automobile manufacturing industry, which has seen continuous decline with the influx of cheaper and more fuel-efficient cars. In fact, manufacturers based in the European Union have formally complained to the European Union Commission that the LCT is an import tariff substitute, resulting in uneven pricing and artificial restrictions in the luxury car segment. As of 2011, the LCT was still a subject of trade talks and has not been resolved to the automotive manufacturers' satisfaction.
While $57,000 may seem like a luxury price when you buy a car in Australia, users of four-wheel drive and special vehicles (such as those for the disabled) are forced to pay the LCT even when the vehicles they purchase aren't luxury vehicles at all. The fact is that in 2011, the LCT applied to 14 percent of vehicles sold new. When it was first introduced, the Luxury Car Tax was applicable to only 3 percent of new cars sold. Clearly, the LCT has to be reconsidered. People who buy a cars in Australia are already paying one of the highest prices in the world, and together with other costs of living contribute to the reputation that the country is an expensive place to live in.
Visit our site if you're wondering how to sell my car for free. Our sister site also allows you to sell or buy quality spare car parts.
No comments:
Post a Comment