Luxury Car Tax to Increase in Budget

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Sunday May 11, 12:06 AM
Fed govt will impose tax on luxury cars

The federal government will increase the tax on luxury cars priced over $57,000 in the first budget tax increase in more than a decade.

The tax increase, to be introduced in Treasurer Wayne Swan's first budget, will affect the sales of about 105,000 cars per year, News Ltd reports.

The tax will increase from 25 per cent to 33 per cent and is mainly aimed at high-end imported vehicles.

Ninety per cent of luxury cars are imported. The tax rise will also impact on locally produced vehicles such as the Holden Caprice, Holden Statesman, Ford's Falcon G6E and the Territory Ghia.

News Ltd reports that the tax will apply to the GST-exclusive value of cars that cost more than $57,123.

Mr Swan said people on six figure salaries were "doing pretty well in Australia".

"It's abundantly clear that there are some people who are receiving government benefits who are on very, very high incomes, who don't need them," Mr Swan told News Ltd.

"And we ought to have a discussion in Australia about whether we can continue to afford that."

http://au.news.yahoo.com/080510/21/16t23.html