Treasurer Josh Frydenberg has rebuffed calls from Liberal MPs to scrap the luxury car tax after Holden’s departure from Australia.
A handful of backbenchers are pushing for the tax, which applies to imported vehicles worth more than $67,500, to be abolished because it was designed to protect a defunct local industry.
“The government has no plans to phase out the luxury car tax,” Mr Frydenberg told The Australian on Wednesday.
Car dealers are slapped with the tax which is passed on to consumers, who pay about $6100 extra for a non-fuel efficient car valued at $88,000.
Liberals Tim Wilson, Craig Kelly, Jason Falinski and James Paterson are behind the push to scrap the levy which raises $675 million a year for government coffers.
It was designed to help local manufacturers, but Australia stopped making cars in 2017.
Holden’s announcement it would scrap the brand at the end of the year has renewed calls for the levy to be canned.
Nationals senator Matt Canavan has raised an exemption for farmers.
“Many farmers have to buy vehicles that are above that threshold to operate their business,” he told the Nine Network.
“That sort of cost on our farms particularly when facing a drought, that’s something that should be looked at first in my view.”
The Australian Automobile Association and Federal Chamber of Automotive Industries are lobbying for the luxury car tax to be abolished.