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Geoff Gwilym

CARS sold as service loan demonstrator vehicles are copping a second hit of stamp duty by state governments that the VACC this week called “daylight robbery”.

VACC CEO Geoff Gwilym said that car dealers are being asked to pay stamp duty on a vehicle because it is a service loan demonstrator and then, when that car is sold, the consumer pays a second lot of stamp duty.

“While these cars may be used for more than one purpose, their principal function is to promote new vehicles to consumers, and that includes existing consumers who may be getting the vehicle serviced or repaired at the dealership,” he told GoAutoNews Premium.

“If these cars are treated as being outside the state revenue office definition of a demonstrator vehicle, it means the government is collecting stamp duty twice on the same vehicle within a few months – once from the dealer and again from the consumer – and this can happen in a matter of weeks or a few months.

“On every service loan demonstrator, that’s just not fair. There are some real challenges with this.”

Mr Gwilym’s comments coincided with a call by Victorian Liberal senator James Paterson for an end to the tariffs on imported cars, given that all cars are now imported.

Mr Paterson was especially scathing of the five per cent tariff applied to vehicles coming from countries that are not part of Australia’s Free Trade Agreements.

Mr Gwilym said: “Motorists are being hit for luxury car tax and import tariffs that alone amount to a $1.1 billion windfall for the federal government.

“That’s before the vehicle has a state stamp duty tax applied, on-road costs and let’s not forget GST on the sale price.

“We are trying to take money out of the back pocket of dealers who are only trying to sell cars to consumers, to be honest it looks like daylight robbery,” Mr Gwilym said.

“How many times do they (governments) want to hit the consumer for the privilege of buying a car so they can take their kids to school?”

A breakdown of the figures show:

  • $650 million collected by the federal government for luxury car tax (LCT) in the 2017-2018 year
  • $470 million in tariffs in the same period
  • The tariffs equate to an average of $1900 per vehicle.
  • In addition, state stamp duties are added to the purchasing burden

Mr Gwilym said it was too much for the government to ask the dealership to pay stamp duty on a vehicle when the large proportion of the time that vehicle is used is to promote that vehicle to purchasers.

“Tasmania this year has changed the regulation so that both types of vehicles (demonstrators and service loan cars) are considered as demonstrator vehicles,” he said.

“There is a breakthrough when legislation was passed that treated service loan and demonstrators in a similar way. That took away the double tax.”

Mr Gwilym said the VACC’s aim was to get the Victorian state revenue office to pause the amnesty program until the duty act and the motor vehicle aspects of the Duties Act 2000 are reviewed.

“I think that needs to happen. We have had reasonably positive discussions with the state revenue office, however they’re not known for giving money back,” he said.

“We’re not asking them to do that. We are asking them to have the act reviewed so they can genuinely say that their collection of duties takes in consideration the way the industry works today.

“That is that there are many, many more demo vehicles at dealerships – many more than there used to be – because there are more consumers that want to drive demo vehicles and also that they are used to help encourage those consumers who want to try a new vehicle while their own car is being serviced.

“To draw a line under these vehicles and demand stamp duty be paid on them, from the dealership, is not recognising the processes and method of vehicle sales today.”

By Neil Dowling