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A new bill has been introduced to Parliament to remove fringe benefits tax on electric cars, in a bid to make them more affordable.
The federal government has introduced the Treasury Laws Amendment (Electric Car Discount) Bill 2022 into Parliament.
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The bill – which was put before Parliament on Wednesday (27 July) – exempts from FBT the use of eligible electric cars made available by employers to employees.
It applies to battery electric cars, hydrogen fuel cell electric cars and plug‑in hybrid electric cars.
The exemption is available for eligible electric cars with a first retail price below the luxury car tax threshold for fuel-efficient cars ($84,916 for 2022–23), first made available for use on or after 1 July 2022.
The FBT exemption will be implemented as an ongoing measure and reviewed after three years to “ensure it remains effective”.
The new bill implements the government’s plan to remove fringe benefits tax (FBT) to make electric cars cheaper so that “more families who want them can afford them”.
In a joint statement with Chris Bowen MP, the Minister for Climate Change and Energy, federal Treasurer Jim Chalmers stated that the “bill is good for motorists, good for employers and their workers, and good for climate action”.
The government ministers have estimated that if an eligible electric car model worth around $50,000 was provided by an employer through this arrangement, the FBT exemption would save the employer up to $9,000 a year.
For individuals using a salary sacrifice arrangement to pay for the same model, their saving would be up to $4,700 a year.
“This measure forms part of the Government’s Electric Car Discount, which will reduce the up‑front and ownership cost of electric vehicles, addressing a significant barrier to their uptake,” the two ministers said in a statement.
“The transport sector is one of the fastest‑growing sources of emissions in Australia and the stronger uptake of electric vehicles can make a substantial impact in our efforts to tackle climate change.
“Importantly – as families struggle with the rising cost of fuel – encouraging more affordable EVs into the market is an important step in addressing transport costs over the medium term and building resilience to global oil prices.
“Yet, right now Australia lags far behind our international peers when it comes to electric vehicle use.
“This legislation will encourage greater take up of electric cars and contribute to reducing transport emissions.”
As well as the new bill, the Albanese government said it will also introduce changes to remove the 5 per cent import tariff for eligible electric cars, and develop Australia’s first national Electric Vehicle Strategy.
You can find out more about electric vehicles and the finance available to access them, in the August edition of The Adviser magazine – out next month. Become a premium member today to make sure you never miss an issue!
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