NEW Western Australian stamp duty rules designed to make life easier for motor vehicle dealers have been criticised by self-styled tax watchdog Taxpayers Australia.
The Office of State Revenue has changed the way it calculates stamp duty on sales of new motor vehicles.
From the start of this month, stamp duty is based on the retail price recommended by the manufacturer or principal distributor.
This formula replaces the estimate of market value based on what an arms length buyer would be prepared to pay.
“The WA Government has once again introduced legislation which bears no resemblance to the real world,” Taxpayers Australia WA president and RSM Bird Cameron partner Rami Brass said.
“This is no more than a blatant grab for more money and the state is effectively calculating stamp duty based on a hypothetical value rather than the true arms length price.”
Motor Trade Association of WA executive director Peter Fitzpatrick said the new rules would make it much easier for motor dealers to administer and calculate stamp duty.
“The old system was a cause of ongoing dispute,” he said.
“Inevitably there were wide disparities between dealers.”
Mr Fitzpatrick said audits by the Office of State Revenue often resulted in motor dealers having to pay extra stamp duty plus penalties for earlier transactions.
“Dealers were wearing flack on a tax that wasn’t theirs to pay in the first place.”
Mr Fitzpatrick said the new arrangements brought WA into line with other States.
He said optional accessories, except transmission, were now excluded from the price when stamp duty was calculated.
The net result is some buyers would be worse off and some would be better off, he said.
Mr Fitzpatrick and Mr Brass agreed that an ongoing concern was the high rate of stamp duty in WA, which has a top marginal rate of 6.5 per cent.
Mr Fitzpatrick said he was aware of fleet managers and individuals purchasing vehicles in other States, such as Queensland, where stamp duty was much lower.
Mr Brass said some motor dealers were being forced to cut their prices, particularly on luxury vehicles, to stop customers buying new cars in other States.
