The Andrews Labor Government has overseen the payment of ‘double taxes’ by licensed motor car traders (LMCTs). It’s an embarrassing and unfair position that needs to stop, says the Victorian Automobile Chamber of Commerce (VACC).
The treatment of loan or courtesy vehicles, used by LMCTs, within the Duties Act 2000 requires review, believes VACC Chief Executive Officer, Geoff Gwilym.
Sections of the Duties Act provide exemptions from duty for LMCTs for vehicles that are used as demonstrator vehicles. But while demonstrator vehicles are exempt from duty under the Duties Act, service loan demonstrator vehicles are not exempt.
“This is a key anomaly and unnecessary financial cost for LMCTs and consumers. It is often the case that LMCTs pay ‘double tax’ on these vehicles, which is entirely unfair. In the end, this drives up the cost of new motor vehicles for Victorian consumers,” said Mr Gwilym.
“Often LMCTs provide service loan demonstrator vehicles on the same basis or interchangeably with demonstrator vehicles. That is, while a customer’s vehicle is being serviced, they may be supplied with a newer service demonstrator vehicle of the same or higher class for the purposes of marketing and up-selling that newer vehicle to the customer.
“The sale of the service demonstrator vehicle will attract duty, whereas a demonstrator vehicle will not, even though the respective purposes of each vehicle are the same. It clearly doesn’t make any sense.”
This anomaly has been recognised and rectified within other jurisdictions. Most recently, the Tasmanian government, as part of its business red tape reduction program, instigated a legislative amendment to the Tasmania Duties Act to exempt LMCTs in that state from the payment of duty on courtesy vehicles.
“VACC believes that the next Victorian State Government should instigate reform of the Duties Act in Victoria, similar to that undertaken in Tasmania,” said Mr Gwilym.
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