Mercedes Says Australia's Luxury Car Tax Will Be Scrapped By 2020

Australia�s infamous Luxury Car Tax could be on the way out, Mercedes-Benz claims.

Speaking to local publication Cars Guide, Mercedes-Benz Australia/Pacific public relations, product and corporate communications senior manager David McCarthy, said the Luxury Car Tax will be abolished in a new European Union free trade agreement.

�I feel confident (by) 2019/2020 there won�t be an LCT and that will have been an 11-year battle.

�LCT will be a casualty in an (European Union) EU free trade agreement. Anyone who tells you otherwise is believing in alternative facts � that�s the reality,� McCarthy said.

Australia�s Luxury Car Tax applies to all premium cars. If a vehicle�s recommended retail price exceeds $65,094 and the car consumes more than 7.0-liters of fuel per 100 km, a 33 per cent tax is incurred on every dollar over the $65,094 threshold. Any car over $75,526, regardless of its fuel consumption, is hit with the same 33 per cent tax.

According to McCarthy, it would make sense for the Australian government to abolish the Luxury Car Tax gradually.

�It�s currently 33 per cent. My personal view is that you want to implement it over a three-year period, so 33, 22, 11, zero.

�Otherwise, you�re going to have a lot of dislocation in the market and no one is going to shed a tear over OEMs suffering, but the government potentially would lose a lot of revenue,� he said.

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