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Cost of Australia’s EV, PHEV tax breaks 10 times higher than forecast – expert
- The Australian Government's Fringe Benefits Tax (FBT) exemption for certain EVs and PHEVs is costing taxpayers $564 million annually, 10 times higher than projected.
- The FBT exemption applies to EVs and PHEVs priced under the Luxury Car Tax threshold for fuel-efficient vehicles and purchased through novated leases.
- The government bears the cost of the employer's fringe benefits tax, resulting in annual savings, but the cost has exceeded forecasts significantly.
- More than 100,000 eligible novated leases have been taken out for EVs and PHEVs since the introduction of the scheme.
- EV sales have increased from 1.8% to 7.4% of new car sales, while PHEV sales have risen to almost 2.0% of the new-car market.
- The Electric Vehicle Council calls for extending the PHEV exemption, highlighting the benefits of EVs in reducing emissions and cutting costs.
- The NALSPA emphasizes the affordability of EVs through novated leases and the potential savings compared to traditional petrol cars.
- After April 1, PHEV buyers will no longer have the FBT exemption, while the exemption for EVs will continue at least until 2027.
- The FBT exemption has facilitated a shift towards cleaner vehicles and reduced the financial burden on Australian households, particularly in outer suburbs.
- The government's FBT exemption for EVs aims to encourage the adoption of electric vehicles, aligning with efforts to reduce carbon emissions and increase energy efficiency.
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