Vehicle buyers could receive more incentives to purchase electric cars as part of the government’s proposal to reduce upfront costs and increase uptake.

Changes to fringe benefits tax and removing the import tariff on electric vehicles are part of a proposed law to make the cars cheaper for more people.

Treasurer Jim Chalmers introduced the proposal to parliament on Wednesday.

It will amend existing tax laws to ensure employers providing employees with an eligible car would not have to pay fringe benefits tax on it, he said.

Employees entering into salary sacrificing arrangements to lease an electric car would also pay less.

Battery electric cars, hydrogen fuel cell electric cars and plug-in hybrid electric cars would be eligible.

The changes will mean an employer providing a $50,000 electric vehicle would save up to $9000 a year, the treasurer said.

People using a salary sacrifice arrangement to pay for the same model would save up to $4700 a year.

“This sends an unmistakable signal to this parliament, to Australian industry and to the Australian people – and beyond – that Australia now has a government which understands the economics of cleaner, cheaper and more reliable energy,” Dr Chalmers said.

The fringe benefit tax exemptions would be reviewed after three years to monitor its effectiveness at driving uptake.

The government will also remove the five per cent import tariff for eligible electric cars and develop Australia’s first national Electric Vehicle Strategy.

– AAP