Government will soon move to significantly reduce the excise taxes on the importation of new vehicles in an attempt to encourage more people to purchase brand-new vehicles as opposed to used.
The Guyana Times newspaper today reported that it was reliably informed by a government source that there was already a draft proposal on the new rates and more information would soon be announced publicly.
According to the newspaper report, the source was unable to confirm whether Government will be moving to increase the excise taxes on imports of used vehicles.
President David Granger had previously stated that used vehicles had created many problems in society and had contributed tremendously to the road carnage in the country.
“Many of those vehicles being imported are being discarded by states that have proper safety regulations, many of the tyres that we use on our vehicles are being discarded by people who know they are unsafe, but we are so happy to get cheap handed downs that we don’t realise that we are jeopardising the safety of our citizens,” Granger had reasoned.
He maintained that second-hand vehicles had a whole host of problems and should not be allowed to enter Guyanese markets.
“People must be discouraged from buying junk,” Granger insisted.
There were several arguments proffered within the public domain that this decision would not benefit low-income and middle-income earners.
Several persons within the auto dealership industry are reportedly not too pleased with this idea, claiming it would be bad for business.
A representative from A&S Auto pointed out that new vehicles already carried heavy prices; therefore, a reduction of taxes on them would be insignificant in comparison to the cost attached to the importation of a used vehicle with the current tax rate.
“If you reduce the tax, the price will still be expensive,” the representative posited, noting that most Guyanese could not afford to spend exorbitant sums on new motor vehicles.
Another auto dealership company, Auto Mart, shared similar views. The company’s representative indicated that this new policy made “absolutely no sense”.
“We’re a Third World country and we have to import what people can afford. If you drop the tax on the new vehicles, that’s fine, but for most people, it will still be too expensive,” he contended. The representative did, however, emphasise the need for a better tax system, but noted that Granger’s proposal should not be the way to go.
“If you want to keep the vehicles on the road up to date, then draw a cut-off time. Let’s say 2005, you can import used vehicles from 2005. Drop the taxes on that and also drop the taxes on new vehicles. Let the taxes be based on the value for those vehicles imported. What he is proposing, dropping taxes on new vehicles and raising tax on old still won’t make it affordable for regular Guyanese,” he explained.
However, Transpacific Motor Spares and Auto Sales noted that the system being proposed should be introduced gradually.
“For the first couple of years, it is going to take a while to digest because we still have a lot of cars that are used that we will need to sell out and also not a lot of people can still afford to buy the new cars even though the taxes are lowered,” the company’s representative noted.
It is understood that the opposition People’s Progressive Party/Civic (PPP/C) will support this decision nonetheless, given the fact that its members have said publicly that the Party would reinforce any decision taken by Government that would bring benefit to people.