Luxury car import tax Australia

Because of our luxury car tax, 33 per cent will be added to the price tag of every vehicle worth over $61, 884, such as the Jaguar XF, sold this year. AFR

A driver walks into an Australian car dealership and buys a new BMW for $69, 400. Had that driver bought the same car in the UK it would have been $14, 000 cheaper. In Japan, the car would have cost $4400 less.

Australia is the only country in the world to have a luxury car tax. That means 33 per cent will be added to the price tag of every vehicle worth over $61, 884 sold this year.

But even taking this odd tax into account, the Australian Automobile Association smells a rat.

“We don’t think the differences can be explained away by the tax or transport costs, " AAA acting chief executive

James Goodwin says.

“Our research exposes some concerning anomalies among the prices of many average, everyday vehicles around the world, " he said.

That research compares the cost of 23 vehicles in Australia, Japan and the UK (Japan and the UK were chosen as comparators because they are predominantly right-hand drive markets).

When it comes to smaller, cheaper makes Australian prices are competitive, especially when compared with the UK. But in the $25, 000-plus price range, Japan is much cheaper. At the luxury end, Australians are the clear losers.

Much to the chagrin of car makers and dealers, not only is AAA urging the federal government to get rid of the ­luxury car tax, it also wants a relaxation of import controls and the removal of all tariffs on vehicles. The ideas have been put to the Assistant Minister for Infrastructure and Regional Development,

Jamie Briggs , as part of a review of the Motor Vehicle Standards Act.

The act prevents Australians buying cars from overseas dealers – so-called parallel imports – and them importing second-hand, or “grey" vehicles.

AAA says as long as imports meet the latest Australian safety and other standards, they should be allowed in.

“Further competition, or the threat of additional competition, will make the current players think about whether they are importing the best vehicles, selling them at the best prices, offering the best dealership and after-sales experience, " Goodwin says.

The Productivity Commission has also recommended opening up the local market.

But as they prepare to cease manufacturing cars in Australia, Holden and Toyota have told the review not to lift import restrictions.