Mercedes-Benz Wants Australia to Drop Its Luxury Car Tax

The facelift of the A45 AMG made the car's fuel consumption to rise just over the limit imposed by Australia's Luxury Tax. Once there, the price of the car increased by well over 10,000 Australian dollars.
Mercedes-Benz A45 AMG 1 photo
Photo: Mercedes-Benz
The Luxury Car Tax imposed in Australia amounts to 33% of a vehicle’s price and comes into effect if said vehicle costs more than AUD75,535 or has an average fuel consumption of over 7.0 liters/100 kilometers. Before its facelift, the Mercedes-Benz A45 AMG has a fuel economy rating of 6.9 liters/100 kilometers, but the power increase brought with it a rating of 7.3 liters/100 kilometers.

This 0.4-liter difference from the previous version made the facelifted A45 AMG become an object of the Luxury Car Tax, a decision that increased its price from AUD63,184 to AUD77,900.

The local Mercedes-Benz officials are naturally upset because of this change and are hoping that this tax will go away. We must note that the Mercedes-Benz Australia officials had nothing critical to say in public about this tax until now, which they have described as “ludicrous car tax.”

I do not know which rare marsupial and rock they used to calculate the 7.0 liter/100 km threshold. It has not moved. I think that is interesting. Perhaps it is because they realize this is influencing buying behavior, but they are also getting tax on it,” David McCarthy of Mercedes-Benz Australia stated in an interview with CarAdvice.

However, the senior manager of public relations for Mercedes-Benz Australia believes that the Luxury Car Tax will eventually be dropped.

Mr. McCarthy thinks the tax will disappear once the Australian Government wants a free trade agreement with the European Union. After all, most premium carmakers come from the EU, and many models are under the incidence of this tax. In the case of exotic cars, the tax reaches a high value, but there’s no doubt that the LCT does limit premium car sales in Australia.
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About the author: Sebastian Toma
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Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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