KY­RON REG­IS

ky­ron.reg­is@guardian.co.tt

Po­ten­tial buy­ers of some brands of new ve­hi­cles will be spared a 30 to 40 per cent price in­crease up to De­cem­ber 31, 2020, af­ter Fi­nance Min­is­ter Colm Im­bert yes­ter­day grant­ed a grace pe­ri­od on the new tax­es and im­port du­ty on pri­vate mo­tor­cars - es­sen­tial­ly giv­ing an ear­ly Christ­mas gift of a break from the new tax­es un­til year’s end.

In a press re­lease, Im­bert ad­vised that at its meet­ing last week, Cab­i­net had agreed that con­cern­ing the an­nounce­ment made in the 2021 Bud­get re­gard­ing an in­crease of tax­es and im­port du­ty on cer­tain pri­vate mo­tor cars, name­ly cer­tain small­er en­gine CNG, elec­tric and hy­brid cars, the new tax­es will be ap­plic­a­ble from Jan­u­ary 1, 2021.

“All pri­vate mo­tor cars that are im­port­ed and cleared through Cus­toms on or be­fore De­cem­ber 31st, 2020 will there­fore be taxed and/or be sub­ject to im­port du­ty at ex­ist­ing rates and/or en­joy the ex­ist­ing tax and im­port du­ty ex­emp­tions,” Im­bert said.

In his Bud­get pre­sen­ta­tion, Im­bert had re­vealed that T&T spends $2.5 bil­lion (US$400 mil­lion) per year im­port­ing an av­er­age of 25,000 mo­tor ve­hi­cles, at least two-thirds of which re­late to pri­vate mo­tor cars. Im­bert said this has cre­at­ed a se­ri­ous leak­age of for­eign ex­change, adding the pro­posed mea­sures to re­move all tax con­ces­sions on the im­por­ta­tion of pri­vate cars would be ini­ti­at­ed to ad­dress this un­sus­tain­able sit­u­a­tion and sup­press de­mand as op­posed to an out­right pro­hi­bi­tion.

In an im­me­di­ate re­sponse, Au­to­mo­tive Deal­ers’ As­so­ci­a­tion of T&T (ADATT) pres­i­dent Ryan Latchu said the this de­ci­sion will have a tan­gi­ble im­pact on the sec­tor.

“The ve­hi­cles which are in the coun­try, which were or­dered and im­port­ed based on the cur­rent con­ces­sions - we now have the op­por­tu­ni­ty to sell these ve­hi­cles at the con­ces­sion­ary pric­ing to the pub­lic, in­stead of go­ing to add the mo­tor ve­hi­cles tax, du­ty and VAT on to these ve­hi­cles, which would have in­creased the price of these ve­hi­cles by on av­er­age 30-40 per cent,” Latchu said.

He said the ADATT had writ­ten to Im­bert’s of­fice to re­quest the ex­emp­tion un­til the new year on Oc­to­ber 8 fol­low­ing the Bud­get pre­sen­ta­tion.

“We are very thank­ful that the Min­istry of Fi­nance and the Min­istry of Trade and In­dus­try would have heard our plea,” he said.

How­ev­er, as new rates of tax and im­port du­ty on the cars in ques­tion take ef­fect on Jan­u­ary 1, 2021, Latchu said the new prices would emerge. For ex­am­ple, Latchu said the Toy­ota Prius C is cur­rent­ly ex­empt­ed from du­ties, mo­tor ve­hi­cle tax and VAT and the sell­ing price is $175,000. How­ev­er, this price would in­crease to $240,000 in 2021 when the new du­ty, mo­tor ve­hi­cle tax and VAT is added.

Latchu con­tend­ed: “From the time you add back the tax­es and du­ties, the price will go up.”

Still, Latchu said the out­look on the in­dus­try is de­pen­dant on the mech­a­nism for the quo­ta sys­tem to be im­ple­ment­ed for the im­por­ta­tion of new ve­hi­cles, a mea­sure which was al­so out­lined dur­ing the Bud­get.

The ADATT pres­i­dent said there is cur­rent­ly no quo­ta in place, so if one is im­ple­ment­ed it would put a cap on the as­so­ci­a­tion’s ac­tiv­i­ty. ADATT mem­bers, ac­cord­ing to Latchu, im­port 15,000 ve­hi­cles an­nu­al­ly on av­er­age.

How­ev­er, Latchu said the ADATT had al­so writ­ten to the Min­istry of Trade and In­dus­try in­di­cat­ing it would like to be part of the con­sul­ta­tion process be­fore the quo­ta mea­sures on im­port­ed ve­hi­cles are im­ple­ment­ed.

Not­ing oth­er eco­nom­ic fac­tors in the coun­try will al­so con­tribute to the out­look on the new car in­dus­try, Latchu said: “It de­pends on if busi­ness­es are clos­ing down, if peo­ple de­cide to keep their ve­hi­cles a lit­tle longer, those things are re­al­ly go­ing to im­pact us.”

If un­em­ploy­ment keeps ris­ing or if there is a de­val­u­a­tion of the cur­ren­cy, Latchu said this would al­so im­pact the new car in­dus­try.

Mean­while, T&T Au­to­mo­tive Deal­ers’ As­so­ci­a­tion pres­i­dent Visham Bawah laud­ed Im­bert for the de­ci­sion.

Bab­wah said the TTA­DA had plead­ed with Prime Min­is­ter Dr Kei­th Row­ley and Min­is­ter of Trade Paula Gopee-Scoon to in­ter­vene since many deal­ers had cars in tran­sit to T&T and cus­tomers who had made down­pay­ments were left in lim­bo.

Bab­wah said the TTA­DA was al­so plead­ing with Gov­ern­ment to low­er the per­mis­si­ble age of used cars from three to four years old and keep tax­es on hy­brid and elec­tric ve­hi­cles at a max­i­mum of 10 per cent. He said the used car in­dus­try saves T&T for­eign ex­change since it does not use its quo­ta of cars to be im­port­ed and used cars cost less than new cars.

—With re­port­ing by

Shas­tri Boodan