ATO targets 'luxury' car buyers

Australian Tax Office could use data matching techniques to target purchasers of cars over the Luxury Car Tax limit, according to reports in the general media today.

News service AAP says: "The tax office is cracking down on luxury car owners after a study found nearly a quarter had failed to lodge an annual tax return at least once."

According to AAP, the probe is part of the Australian Tax Office's (ATO) "conspicuous wealth project". The project has already targeted boat and aircraft owners.

Under the crackdown, data on vehicles worth $57,009 or more, which were registered or transferred between July 1, 2005 and June 30, 2007, will be matched against the records of individual taxpayers to check they are paying the right amount of tax. About 600,000 taxpayers are expected to be checked as part of the probe, which start next month, AAP reported.

The ATO protocol for the probe, released under privacy laws, reads: "The rationale behind this work is that those earning high incomes will accumulate assets. The risk is that some of those people will take the opportunity provided by a cash economy environment to not pay the right amount of tax and this will manifest itself in the lifestyle they lead, eroding confidence in the tax system."

Interestingly many vehicles over the current LCT limit of $57,123 are not luxury cars. In fact, variants of cars like Toyota's Tarago, Chrysler's Grand Voyager and VW's Multivan and a significant number of all-wheel-drive seven-seaters -- all favourites of "working families", are all at, or over, the LCT threshold.

- with AAP

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