The Tax Institute welcomes the opportunity to make a submission to the Senate Economics Legislation Committee (Committee) in relation to the inquiry into the Treasury Laws Amendment (Electric Car Discount) Bill 2022 (the Bill).
In the development of this submission, we have closely consulted with our National Fringe Benefits Tax & Employment Taxes Technical Committee to prepare a considered response that represents the views of the broader membership of The Tax Institute.
The Tax Institute broadly supports the policy intention of the Bill. Fringe Benefits Tax (FBT)imposes significant compliance costs on employers. These costs disincentivise employers from providing employees zero or low emission vehicles (ZEVs) as part of their remuneration package. The Bill seeks to remove this disincentive and encourage a greater uptake and adoption of ZEVs. Incentives that promote the uptake of ZEVs are consistent with the approach taken in other jurisdictions.
However, there are aspects of the Bill that may require further consideration or clarification.
We note that Australia’s FBT regime contains considerable complexities, and that public consultation was not undertaken during the development of the Bill. As a result, certainamendments to the Bill may be required to ensure that the policy intent is effectively delivered without giving rise to inconsistent or unintended outcomes. The Bill may also require clarifying amendments to ensure that the proposed exemption is readily understood and applied by taxpayers and tax professionals. The Committee should also consider whether further steps should be taken to promote the uptake of ZEVs, and whether these incentives should be driven through tax concessions or other avenues, such as greater investment into the supporting infrastructure.
The Tax Institute
Senate Economics Legislation Committee
Julie Abdalla, Tax Counsel
The Tax Institute
02 8223 0058