Time to Review Stamp Duty on Heavy Vehicle Registrations
The recent release of the Grattan Institute’s policy priorities research shows that stamp duty is a drag on the community and a bad tax from a transport business perspective, according to the National Road Transport Association (NatRoad).
Warren Clark, CEO of NatRoad said: “The finding that replacing taxes on insurance and motor vehicle registrations with a broad-based property tax could make Australians up to $1.5 billion a year better off, adds to the other compelling reasons to get the stamp duty monkey off industry’s back.
“Stamp duty should be abolished as it is an inefficient tax and is antiquated and out-of-step with a modern revenue system. This message has been underlined in all major taxation inquiries, including the Henry Tax Review, but has gone unheeded for too many years.
“There are unique and perverse reasons that heavy vehicles are already too expensive in this country than elsewhere in the world. For example, to meet current Australian regulations, heavy freight vehicles must be 50 to 100mm (2–4%) less in width than vehicles in other major markets. This costs manufacturers $15–30 million per year to redesign their vehicles, and in some cases reduces the availability of safer, cleaner models. The Government has announced that this issue will be addressed but when you add to this poorly thought out regulatory issues, the stamp duty costs of around another three per cent of the vehicle’s value on registration, you are looking at a situation that must be rectified.
“If the States are not going to abolish stamp duty then at the least there must be a cap on or a reduction in the percentage rate for stamp duty on heavy vehicle registrations. Alternatively, the stamp duty regime for heavy vehicles could be better designed to give incentives to purchase newer, safer vehicles, as is currently the case with the NSW exemption for registration of new heavy trailers. Reform might also mean that stamp duty raised from imposts on heavy vehicles could be allocated to infrastructure spending that would benefit the heavy vehicle industry like the improvement of bridges to allow high productivity vehicles better road access.
“The message is clear: stamp duty reform is long overdue. The heavy vehicle industry already pays too much by way of vehicle registration charges and the stamp duty impost adds salt to that wound.
“Heavy vehicle charges must be fair, transparent and sustainable and be stamp duty free,” Mr Clark added. “Abolition of stamp duty or its radical overhaul must be a priority.”