Electric BMW unfazed by tax grab plans

BMW says it is holding fast with plans to lease out its all-new electric city car despite planned changes to tax laws that will bite deeply into owners’ pockets.

The German luxury car-maker is yet to make changes to its business plan in response to the recent proposed tax changes that are likely to make leasing its $70,000-plus i3 electric city car much more expensive, with BMW product communications manager Scott Croaker saying it was still a case of wait and see.

“I don’t know if the laws are going to be pushed through or much more thought given to the proposal, and at this stage nothing has changed,” Mr Croaker said.

“Certainly we’ll keep it in consideration with the proposed new laws, and we’ll have to adapt any sort of leasing package accordingly, but until it comes to fruition we’ll just move ahead.”

BMW is considering offering a number of ways that customers can buy the i3 electric city car, revealed in full overnight, including the option of buying the car outright or leasing it from the car-maker.

However, earlier this month the federal government said it would remove the statutory formula method of judging how much of a leased or salary-sacrificed car’s use was for personal benefit, which was fixed at 20 per cent.

The proposed change to the FBT laws, which will already impact on new or renewed car leases, is expected to raise $1.8 billion towards plugging a $4.8 billion federal budget black hole exposed in the shift to a floating carbon tax price a year ahead of schedule.

The i3 is due on sale in Australia mid-way through next year, while the proposed change to the fringe benefits tax laws are due to be mandated – if the Labor government is re-elected – from July 1 next year, although it is backdated to July 16 this year.

Mr Croaker said BMW was better off waiting for the legislation to pass parliament before changing any of its plans for the i3, or even settling on what was a comfortable mix of private sales and leasing.

“If it starts looking like it is going to become a realistic change to the FBT or the leasing laws, we’ll have to revisit it, but at this stage I don’t think it is high on the agenda when we’re looking at launching the i3,” he said.

“All avenues of sale, whether it be retail purchase or company lease or whatnot, are certainly important to BMW.

“We’ve got a services arm that looks at leasing, insurance, purchasing arrangements and support for all BMW customers and that wouldn’t be any different to the ‘i’ series.”