SA could dump car stamp duty, but pay more for rego

South Australian motorists should pay about $75 more for annual registration but not have to pay stamp duty when buying a vehicle, the SA Motor Trade Association says.

Keeping the overall burden the same but removing a barrier to buying a vehicle would improve road safety by reducing the average age of the car fleet, the SA MTA says in a submission to the state tax review.

It would also help consumers by spreading the cost over several years rather than making people pay one lump sum.

It's a more difficult process than it needs to be

SA MTA chief executive Paul Unerkov said car dealers often had to collect the stamp duty and then pay it to government.

"It's a more difficult process than it needs to be," he said. "Let's just put it all into one, it'd be a simpler, fairer system."

Rego costs vary but on a 4-cylinder, privately owned car, registration plus compulsory third party insurance and other taxes and levies costs a South Australian motorist $690 a year.

On purchasing a $20,000 car, the buyer must pay $740 in stamp duty. Under the MTA proposal, a car buyer who owned their vehicle for less than 10 years would come out ahead, creating an incentive which would help renew the vehicle fleet more quickly.

Mr Unerkov dismissed suggestions the proposal was aimed at increasing sales for dealers.

It's actually about spreading the load over a longer period of time

"That would be far from what we've put up," he said.

"We've put up a balanced argument. We've considered the consumer and think this would make it easier for the consumer to pay.

"We're not talking about jacking up costs and making people pay more, it's actually about spreading the load over a longer period of time."

Mr Unerkov met Treasurer Tom Koutsantonis this week to discuss the proposal. Mr Koutsantonis said one-on-one meetings with interest groups had been valuable in determining which proposals were put forward for economic modelling as part of the tax review process.

"The overall theme from a lot of the submissions has been that transactional taxes like stamp duty and conveyance duties are inefficient," he said.

Motor vehicle registrations raise about $400 million a year for the government

Mr Koutsantonis has provided an extension for submissions to the state tax review until close of business on Friday, April 24.

Motor vehicle registrations raise about $400 million a year for the government with stamp duties on vehicle transfers adding another $160 million to the coffers.

SA's stamp duties are almost always higher than in other states for private vehicles below $30,000.

Mr Unerkov said this was encouraging motorists to buy their vehicle interstate and bring it back to SA.

It made SA sellers uncompetitive and led to the Government missing out on revenue altogether because buyers went across the border.