The motor industry is advocating for the extension of the fringe benefits tax discount for plug-in hybrid cars as sales continue to surge.

An unexpected resurgence in the popularity of hybrid cars has prompted the motor industry to request that tax benefits for plug-in hybrids be retained, arguing they will remain “critical” to reducing carbon emissions over the next decade. Plug-in hybrids are currently exempt from fringe benefits tax, potentially saving around $20,000 for new cars bought under a novated lease. However, this benefit is set to end in April next year.

The federal government agreed to end tax breaks for plug-in hybrids as part of a deal with the Greens and independent Senator David Pocock to pass its election promise of introducing an “electric car discount.” The Greens and Senator Pocock argued that exempting plug-in hybrids, which contain both a battery charger and an internal combustion engine, would effectively subsidize a fossil fuel.

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