The initial VAT rate of 20% resulted in controversy across the caravan industry resulting in the Coalition backing down and lowering the rate to 5%.

The caravan tax was first unveiled in the 2012 budget at a rate of 20%. After public pressure and widespread protest campaigns, the Coalition backed down and agreed to only implement a 5% VAT rather than the initial 20%.

The controversy behind this move created the caravan industry to lobby against the 20% VAT with local MPS running a campaign ..

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