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Treasurer Tim Pallas says the High Court decision outlawing the levy will “totally recast” the way the state raises revenue.
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Victoria to hand back $7m in unlawful EV taxes
30 November 2023
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9 minute read
The Victorian government will refund the $7 million in taxes it unlawfully collected from electric vehicle owners with interest, Treasurer Tim Pallas has confirmed.
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The decision comes after the High Court last month struck down the controversial law – which imposed a 2.8c levy for each kilometre driven by an EV – for being an “excise duty”, outside the state’s constitutional powers.
“The advice is we should be repaying those bonds,” he told reporters yesterday.
“We’re now going through a process of identifying who it is that we need to rebate, and we’ll go through the process of making those rebates.”
“I think we’ve even decided to be sufficiently generous, albeit there isn’t an obligation to pay interest, we’ll pay interest on the retention of those funds.”
Mr Pallas said the process could take a few months, but Shadow Treasurer Brad Rowswell called on the government to refund taxpayers before Christmas.
“Today, more than a month after its EV tax was found unconstitutional by the High Court, Labor has finally confirmed it will refund drivers who paid its illegal tax but has given no clear indication when refunds will be paid,” he said.
“In the middle of a cost-of-living crisis, it is the least Labor can do before Christmas, rather than ‘months’ as the Treasurer indicated.”
Mr Pallas criticised the High Court’s landmark 4:3 ruling which disrupted the plans of other states including NSW and Western Australia to levy a similar charge on EV owners.
“The reimagining of the Constitution by the High Court … is going to cause very substantial problems for every state,” he said, and the next treasurers’ meeting would discuss its ramifications. “It could well mean that we’ll have to totally recast the way that we raise revenue in this state.”
However, Mr Rowswell said the government should also rule out the possibility of imposing more taxes.
“After introducing or increasing 53 taxes and charges since coming to office, Labor must also rule out introducing more taxes on Victorians.”
Meanwhile, Greens spokesperson Sam Hibbins told The Age that the state should consider introducing EV subsidies to make cleaner vehicles more affordable.
“We don’t have the sorts of fuel efficiency standards like other countries have, and that’s why it’s so important that the state government now look actually how to make electric vehicles more affordable, not more expensive.”
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