In a strongly worded statement, the Australasian Fleet Management Association (AfMA) announced opposition to a new federal tax measure, the Electric Car Discount bill, citing the extra financial burden it placed on employees who must drive electric vehicles (EVs), reported Global Fleet Auto News, an Australian-based online news resource.

Passed last month by the Australian federal government, the bill currently exempts EVs and PHEVs from the Fringe Benefits Tax (FBT) for a limited period to encourage companies to adopt zero emissions cars in their fleets. The exemption applies to companies, not employees who drive company vehicles.

FBT applies when an employee has used a company vehicle for personal use such as taking it home each night. The amount of benefit is calculated using an approved formula from the Australian Taxation Office.

Global Fleet Auto News published AfMA’s statement regarding the Electric Car Discount bill:

“The Australasian Fleet Management Association believes the removal of FBT for organizations but not their drivers is unconscionable. AfMA highlighted this problem in its response to the Government’s National Electric Vehicle Strategy consultation paper and has communicated its concerns directly with the Treasurer, the honorable Jim Chalmers.

It’s hoped common sense will prevail, leading to urgent changes to the Electric Vehicle Discount Bill, thereby removing barriers to decarbonization and preventing likely industrial action.”

 Adding FBT to the cash component of a remuneration package provides a holistic position of the benefits received by an employee from the employer.

For example, said Global Fleet Auto News, “if the employee is paid $80,000 cash and receives the benefit of a company car with a reportable FBT value of $10,000, the government deems the total financial benefit to be $90,000 which is then used to calculate eligibility for various family assistance payments and other government financial support.”

Calling the bill in its current form “unconscionable” is based on the argument that electric vehicles are more expensive to buy and operate, compared to the gas or diesel car it replaces. As a consequence, the reportable FBT value will be higher. It would also depend on the method used to calculate FBT and the amount of personal use by the employee.

AfMA indicates overall support of the bill though it would like to see changes made that shield the employees (drivers of fleet vehicles) from unintended impacts to the household budget.