Electric Cars Skip Petrol Tax Hike in New Zealand

April 24, 2018 Taxation in New Zealand

Electric vehicle taxWELLINGTON – Should electric cars have to pay an electric tax to cover the damage they cause to roads? Some New Zealanders think they should.

Controversy is arising in New Zealand regarding the potential tax benefits to be seen by electric cars after the introduction of fuel taxes in the country’s biggest city, Auckland.

Currently, the government of New Zealand is investigating the feasibility of hiking petrol taxes in New Zealand by between NZD 0.09 per litre to NZD 0.12 per litre, with the Auckland Council looking to enact a further hike of NZD 0.115 per litre of petrol sold in the city.

The new taxes are intended to be used to help fund and develop new roading projects, improve road safety, while also paying for new public transport and rail developments.

Some vehicles, namely diesel cars and electric car do not face the petrol tax, and instead are charged an equivalent road user charge on regular basis.

However, under the government’s current incentive package for the uptake of electric vehicles, these cars enjoy a reprieve from the road user charge until at least 2021.

Effectively this means that the potential tax hike of NZD 0.235 on petrol will not in any way impact the drivers of electric cars.

As the taxes are used to fund repairs to roads from damage caused by cars, some taxpayers are claiming that the tax break is unfair, as electric cars cause comparable amounts of wear and tear as traditional petrol vehicles.