Unconstitutional tax: Victorian Government to repay millions to motorists

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Owners of electric and plug-in hybrid vehicles who paid the state’s unlawful road-user charge will be reimbursed with interest, following a recent High Court decision.


The Victorian Government will repay $7 million in taxes to electric and plug-in hybrid vehicle owners who paid the unlawful charges before they were abolished in October 2023, reports ABC News.

In addition to the fees themselves, owners will receive interest on the payments – with the process expected to take several months to complete.

“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,” Pallas said to the ABC.

“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.”

The news comes somewhat sooner than expected, after VicRoads told owners who paid the charges in October 2023 that a ‘fully-considered response’ would take months to deliver.

The road-user tax came into effect on 1 July 2021, and charged owners of electric and plug-in hybrid vehicles in Victoria on a per-kilometre travelled basis.

Adding to the already controversial charges were increased fees, which easily outstripped consumer price index rises.

That was prior to the successful High Court challenge, where four judges declared the road-user charge was unlawful and ‘unconstitutional’ in a landmark ruling.

The issue created tension in legal circles, with the New South Wales Government set to introduce a road-user charge from 1 July 2027.

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