Push to cut tax from company EVs
A bill seeking to improve electric vehicle (EV) uptake by removing fringe benefit tax (FBT) for five years from cars with plugs that are provided to staff as part of their salary package will soon go before Parliament.
Julie Anne Genter, the Green Party’s transport spokesperson, says her members’ bill is an opportunity for the coalition government to plug the gap in EV incentives.
Her Income Tax (Clean Transport FBT Exclusions) Amendment Bill was drawn from the members’ ballot on March 21 and now awaits its first reading in Parliament, after which it is likely to be referred to the transport and infrastructure select committee.
Genter, pictured, says the draft legislation aims to provide a clear financial incentive for employers to purchase new EVs as company cars.
“This bill is an opportunity for the government to address a glaring hole in its plan to electrify the vehicle fleet and meet their own commitment to reducing carbon emissions,” she explains.
“The percentage of electric vehicles coming into the country has plummeted since the government repealed the clean car discount, and the industry has warned that the high rate of road user charges (RUC) that will be applied to EVs from April will further disincentivise the switch to efficient, low-carbon vehicles.
“This bill would also build on the progress the Greens made last term when the Labour government adopted an amendment of mine that saw bicycles, electric bicycles, and other low-emissions transport exempt from fringe benefit tax when used for commuting.”
She notes the majority of new vehicles imported into New Zealand are purchased by businesses, and incentivising employers will mean more EVs will become available in the second-hand market in a few years.
The bill also clarifies that for the purposes of the FBT rules a double-cab ute must be treated as a car.
Genter claims the policy is unlikely to have significant revenue implications and is a temporary measure to address a critical need for climate action.
She adds the EV Leadership Group, established by Simon Bridges, National’s former minister of transport, recommended a similar FBT exclusion policy and National campaigned on the policy in opposition in 2020.
“Now they can vote for my bill to ensure that New Zealand maintains the momentum in transitioning the fleet to low-emissions vehicles, which is an essential action needed to meet our climate commitments,” she says.
