Push to change car tax rebate
By Ari Sharp | smh.com.au | 26 August
The apparently inconsistent fringe benefits tax concession rules have long come under criticism by those seeking to encourage public transport use.
In the US, tax-exemption benefits for public transport were introduced 25 years ago, while commuters in Canada have been able to claim a tax rebate of 15.5 per cent of the cost of a weekly or monthly ticket since 2006.
Despite those examples, the Senate committee looking at public transport has recommended against tax incentives for public transport use, arguing in part that "a policy that focuses political attention on making public transport cheaper, if it takes attention away from the primary need to make it better, may be counter-productive".
But it did push for the Government to investigate reducing or even scrapping the car tax concession, recommending that "the Government should change FBT rules so that the scope of exemptions is consistent between car transport and public transport".
The committee noted that when it asked Treasury the purpose of the car tax concession, which last year cost the government $1.7 billion, it "gave an uninformative answer which avoided the question".
The Australian Local Government Association argued for greater targeting of the tax concession, which it said had merit for people in rural regions but led to "perverse outcomes" in metropolitan areas.
First published by Smh.com.au on August 26 2009
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