Victorian Treasurer Tim Pallas has revealed the government received advice that it needs to repay the electric vehicle tax paid by drivers, plus interest.
Under the tax, drivers of electric and hydrogen vehicles pay 2.6 cents for every kilometre they drive.
The tax is designed to replace the fuel excise of 44.2 cents a litre that regular drivers pay.
This is following a High Court decision which ruled the state’s EV tax as invalid.
It is not currently known how much this repayment will cost Victorian taxpayers.
The Allan government will be forced to refund about seven million dollars’ worth of taxes paid by electric vehicle drivers after the High Court ruled the charge as unconstitutional.
Last month, two electric vehicle owners from Melbourne successfully argued that the state government does not have the power to impose the tax.
The High Court then ruled the EV tax invalid as a result.
Victorian Treasurer Tim Pallas says the government had received advice that there is an “obligation” to refund the money.
“We’ve even decided to be sufficiently generous … we’ll pay interest on the retention of those funds,” Mr Pallas said.
The Victorian government will repay electric vehicle taxes to drivers after the High Court found the tax to be unconstitutional.
Treasurer Tim Pallas revealed the government was advised to repay about $7 million worth of the collected taxes to vehicle owners.
The decision follows last month’s landmark High Court ruling, which found the state’s road user tax on low-emission vehicles was found to be constitutionally invalid.
The treasurer said it would take “a few months” to process and identify who is owed money.
“We’re now going through a process of identifying who it is that we need to rebate and we’ll go through the process of making those rebates,” he said.
“I think we’ve even decided to be sufficiently generous, albeit there isn’t an obligation to pay interest, we’ll pay interest on the retention of those funds.
“It’s a relatively small amount.
“What is not a relatively small amount is a reimagining of the constitution by the High Court … and it’s going to cause very substantial problems for every state.”
Victorian drivers Chris Vanderstock and Kath Davies launched the lawsuit shortly after the state government introduced its ZLEV road user charge.
The law charged electric and hydrogen vehicle owners 2.8 cents for each kilometre they travel during the year and plug-in hybrid vehicle owners 2.3 cents.
In October, the High Court agreed, finding the Victorian tax was unconstitutional.
Victoria was the only state to tax EV drivers, but others had planned similar levies that have now been called into question after the court ruling.
