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The Electric Vehicle Tax

April 13, 2021

Less than 1% of vehicles in Australia are electric. Nevertheless, a couple of states in Australia, including Victoria, have introduced taxes for electric vehicles. The governments of these states have maintained that electric vehicles reduce their excise revenue from diesel and petrol. This new policy will increase government revenue, but it may reduce the number of electric vehicles on Australian roads.

Ultimately, the country will not be able to meet its renewable energy targets. That is why environmentalists have ganged up to oppose the new law. They believe that the taxes would encourage people to stay away from fuel-efficient cars.

The electric vehicle tax varies from state to state. In Victoria, the government prefers a 2.5 c/km for every road user with a fully electric vehicle. If you are driving a hybrid vehicle in Victoria, your tax rates will be 2c/km. After immense pressure from electric vehicle owners, the Victorian government announced a $100 yearly discount.

Tax Incentives

The tax law encourages tax incentives. Governments can offer discounts to electric vehicle owners during registration or after registration. This is meant to lower the costs of operating electric vehicles. Environmental activists have suggested that this may have a positive impact on the environment. However, this can only happen if the cost of operating an electric vehicle becomes lower than the cost of operating a petrol vehicle in Australia.

Victoria’s government has not created a defined structure for the new electric vehicle tax. Nevertheless, the tax will most likely encompass a yearly charge and some levies on each kilometre covered by an electric vehicle. Fortunately, the tax will not affect hybrid vehicles in the short term.

Opposition to the New Tax

Australian electric vehicle owners have condemned the new tax. They have pointed out that Australia is now the only country in the world with an electric vehicle tax. While governments worldwide are incentivizing renewable energy initiatives, some Australian state governments seem to be encouraging the consumption of foreign oil and the destruction of the environment.

Leading players in the electric vehicle industry believe that the government must find a way of getting funds to improve roads and highways. Placing a tax on electric vehicles seems to be the obvious solution. However, the long-term impact on the environment cannot be underestimated. That is why the government must be ready to forgo road user charges to reduce fossil fuel emissions in Australia.

Final Thoughts

The electric vehicle tax law has elicited a heated debate. On the one hand, some state governments maintain that they need money to repair and construct roads. On the other hand, environmental activists maintain that the cost of fighting climate change must be met by the government and not by electric vehicle owners.

If you want to reduce your carbon footprint and live greener you can get solar panels installed in your home which is being supported by the Victorian government with the help of incentives. Call us today for a free quote.

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