Saturday, February 24, 2018

Double the price? - Motor Vehicle Tax will hurt low, middle income earners

The price of this used vehicle could go from $85,000 to $160,000 says the Used Car Dealers.

Low and middle income earners will be severely affected by Government's reintroduction of taxes on hybrid and compressed natural gas vehicles, says president of the Trinidad and Tobago Automobile Dealers Association, Visham Babwah.

According to Babwah, a four-year-old Toyota Prius car, the first hybrid vehicle to be tested and sold commercially, could go from $85,000 to $160,0000.

He was responding to proposals in Finance Minister Colm Imbert's 2017/2018 national budget.

Babwah said vehicles favoured by low and middle income earners would suddenly become out of range.

He added that the new taxes on the foreign used car industry would send dealers bankrupt or on the breadline.

Imbert announced a 25 per cent increase in motor vehicle tax on cars with engines 1599cc to 1999cc on vehicles from October 20.

President of the Trinidad and Tobago Automobile Dealers Association, Visham Babwah. -Photo: DEXTER PHILIP

Babwah said, “The Government has implemented the measures on this budget and they have the intention of destroying us, the foreign used car dealers. They are aware that the law that was only assented last year for the removal of the concessions of the hybrid and electric car was going to expire in 2020. We went ahead and ordered and these cars would not meet the cut-off date of October 20 that the Minister stated last year, so we have cars in warehouses waiting to be shipped and we have contractual agreements and arrangements with our suppliers to ship cars for us for another three months. We cannot meet that deadline and if we don't met that deadline the amount of taxes we have to pay it could literally send dealers bankrupt.”

Babwah said the Minister had not consulted with dealers before implementing the new taxes.

The incentive on hybrid vehicles was introduced last year to encourage the use of environmentally friendly vehicles. That was expected to expire in 2020, Babwah said.

He also disagreed with Imbert's comments that in 2017 the country imported 35,000 vehicles at a cost of US$500 million. Babwah said the foreign used car industry imported 5,000 vehicles in 2017.

“This is very serious. This is the second time in two years this Government came and introduced taxes with immediate effect. Only the wicked and devil does things like that because they know if they do that and they will smile and people will go bankrupt and on the breadline,” he said.