Toyota urges Luxury Tax axe

Toyota Australia senior executive director sales and marketing David Buttner says the Luxury Car Tax is inefficient, punitive and poorly designed.

"Toyota is Australia's number one luxury car brand according to the Luxury Car Tax regime. In 2010 the top two vehicles exceeding the Luxury Car Tax threshold were the Toyota Prado and LandCruiser with 15,423 and 7,273 car sales respectively," Buttner says.

"The current Luxury Car Tax was introduced in 2000 and since then the price customers are prepared to pay for cars has risen. However the tax threshold has not kept pace and today customers have to pay an unfair tax on cars that exceed $57,466, a level that most people would not consider to be a luxury car."

Toyota Australia believes the tax also penalises people who customise their vehicles.

"With an increasing number of accessories, such as roof racks, bullbars and tow bars available as vehicle extras, vehicles priced below or on the cusp of the Luxury Car Tax threshold currently creep past the threshold once the accessories are added," Buttner says.

He says the tax was discriminatory because it only applied to vehicles and no other luxury item.

"Toyota Australia and the Federal Chamber of Automotive Industries have long opposed the Luxury Car Tax on the basis that no other consumer product has an additional tax applied simply because the value of the product exceeds an arbitrary threshold.

"It is a tax people have to pay in addition to GST, stamp duty and registration fees when buying a new car. On top of that they pay tax on the fuel they use in their cars," Buttner says.

"Toyota Australia would like to see the Luxury Car Tax abolished. But if not, then at the very least, it should be fundamentally reformed to feature a more realistic threshold and to exclude low emissions vehicles and parts and accessories from the tax," Buttner says.