Australian Government to Impose More Taxes on Luxury Cars

The Australian federal government is planning to increase tax on luxury cars priced over $57,000 AUD from25% that it is today, to 33%. The announcement was made by Federal Treasurer Wayne Swan who said that an increase in tax on luxury cars is fair because people who buy them can afford it.

"We don't think it is unreasonable for people who have done well in recent years from government decisions in terms of top-end tax cuts, just pay a little more for a luxury car," Mr Swan told the Nine Network.

The tax increase, to be introduced in Swan's first budget, will affect about 10% of the cars sold annually in Australia or approximately 105,000 vehicles. Among the cars that cost over $57k are a few locally produced vehicles like the Holden Statesman and Caprice. -Continued

Opposition treasury spokesman Malcolm Turnbull told reporters that Swan’s new tax will create a domino effect pushing all car prices up and feed into inflation. "It adds to the cost of one part of the motor vehicle universe and inevitably the price of other vehicles will move up, because that will give them a bit of headroom,'' Mr Turnbull told ABC TV.

"So all cars in Australia will be more expensive as a result of this - bear that in mind. And that feeds into inflation because if you put the price of anything up it feeds into the price of CPI (consumer price index)”

Something tells us that Mr Turnbull could very well be right…

Via: SMH