The Fringe Benefits Tax (FBT) exemption for electric vehicles (EVs) in Australia is set to remain intact, regardless of the outcome of the upcoming federal election. The federal Opposition, led by Peter Dutton, has stated that they will not repeal the EV tax break, which is currently available for EVs priced below the Luxury Car Tax (LCT) threshold of $91,387 when bought through a novated lease.
Opposition Leader Peter Dutton’s Stance
When asked about the possibility of scrapping the EV tax break, Opposition Leader Peter Dutton made no such pledge. In fact, he criticized the incumbent Labor government’s New Vehicle Efficiency Standard (NVES) and the proposed $14,000 tax on a Ford Ranger, which he claimed would be a “big tax on people who are in the market to buy a car over the next few years.” Dutton emphasized the importance of choice for Australians and stated that the government should not impose a new tax on people who are considering purchasing a car.
Background to the FBT Exemption
The FBT exemption for EVs is available for vehicles priced below the LCT threshold of $91,387 when bought through a novated lease. This means that employers can claim a deduction for the full purchase price of the vehicle, which in turn reduces the employee’s taxable income. In essence, the government absorbs the cost of the FBT bill, which would typically be passed on to the employee, resulting in annual savings of up to five figures.
Statistics on EV Adoption
Since the introduction of the FBT exemption, EVs have become increasingly popular in Australia. According to a report by the Australian Financial Review, EVs now account for 7.4% of new vehicle sales, while PHEVs (plug-in hybrid electric vehicles) have risen from less than 1.0% to almost 2.0% of the new-car market.
The Electric Vehicle Council’s Response
The Electric Vehicle Council (EVC), a lobby group for EV owners, welcomed the Coalition’s backing of the FBT policy. “We are pleased to see our call for bipartisan support during the election campaign answered, with the Coalition’s backing of the FBT policy,” said Julie Delvecchio, the chief executive of the EVC. “It is clear that both major parties recognize the importance of this policy in cutting the cost of living for all Australians. Maintaining this commitment means more Australians can confidently plan for an electric future.”
Additional Benefits of the FBT Exemption
The EVC also highlighted the additional benefits of the FBT exemption, including the potential to save up to $3000 annually in fuel and maintenance costs for EV buyers. Furthermore, the scheme has helped to grow the used electric car market, making more people consider purchasing an EV.
Review and Future Uncertainty
The FBT exemption is set for review this year, following the May 3 election. The outcome of this review could potentially impact the future of the FBT exemption. However, for now, the Coalition’s stance on the matter suggests that the EV tax break will remain intact, at least for the time being.
The government’s decision to continue the FBT exemption is a recognition of the growing popularity of EVs in Australia. By maintaining this policy, the government can encourage more Australians to switch to electric vehicles, which can help to reduce greenhouse gas emissions and improve air quality.
Key Takeaways
* The Fringe Benefits Tax (FBT) exemption for electric vehicles (EVs) in Australia will remain intact, regardless of the outcome of the upcoming federal election. * The Coalition has stated that they will not repeal the EV tax break, which is currently available for EVs priced below the Luxury Car Tax (LCT) threshold of $91,387 when bought through a novated lease. * The FBT exemption has helped to drive the growth of the EV market in Australia, with EVs now accounting for 7.4% of new vehicle sales. * The Electric Vehicle Council (EVC) has welcomed the Coalition’s backing of the FBT policy, recognizing its importance in cutting the cost of living for all Australians.