Latest update April 20th, 2024 12:59 AM
Feb 04, 2016 Features / Columnists, Peeping Tom
Why would a government which had promised consumers relief from the Value-Added Tax rate of 16% instead reduce the taxes on what is essentially new motor vehicles?
This measure has nothing to do with tax reform which is still a work in progress. Why then would the government pluck this rabbit out of its hat?
This is not a means to collect more taxes. It is not a revenue- generating measure. It will lead to a tax loss. Did the government do a study to determine just how many millions of dollars it is likely to lose by this measure?
So why did the government opt to reduce the import taxes on vehicles less than four years old? The answer to that question lies in the interests that the tax relief on new vehicles will serve.
But whose interest does it serve?
It surely does not serve the interest of the small man. The small man has had no relief from these taxes on the importation of new vehicles. The small man cannot afford to pay the duties and taxes on new vehicles. The small man cannot afford the price of a vehicle four years old or less. It is beyond the reach of the small man.
So just who does this reduction benefit? Who lobbied for this reduction? Certainly not the private sector! In fact, they have found the concession unnecessary at this stage. So who does this reduction benefit?
Well if you are an importer of new cars, you will be pleased by this development. If you are assembling new cars locally you will also be pleased. The government must answer just who this reduction will benefit because there is no evidence that even with the reduction the average man will be able to buy a new vehicle.
Many average people now own their own vehicles. They own it because they have been able to import reconditioned cars. They own it because they could import vehicles older than four years and even older than eight years.
If the intention is to encourage consumers to buy new rather than old cars, then those making these policies have no clue about the purchasing power of the average man. The cost of a new car even with the new taxes is beyond the reach of the poor man.
If the ban on the importation of vehicles eight years and older is intended to reduce emission levels, this is another misplaced measure. The way to control emissions is not through taxes. The way to control emissions is to ensure that emission tests are carried out on vehicles as is done in other parts of the world where motor pollution is a problem.
Guyana does not have a problem with motor pollution. So why are we moving to discourage the importation of older cars which are the only vehicles that the poor man can afford? Rich countries such as Canada and the United States do not take vehicles eight years and older off their roads and they have an air pollution problem on the roadways because of the large number of vehicles being used in their transportation system. So why should Guyana be banning vehicles which are eight years or older?
Have we not learnt anything from the time when you had to get permission from the PNC government to import a vehicle? The excuse then was the shortage of foreign exchange but even if you had the foreign exchange you still had to go begging for a license to import a vehicle.
We are going back down the same road whereby the government is deciding what age of vehicle you can buy. It is the same road to import controls. It is a failed strategy and this time it will also be a failed strategy because it will mean that many a poor man who can only afford a cheap vehicle will not be able to do so while the rich man who can afford to buy an expensive vehicle smiles all the way to the tax office to pay his reduced taxes.
If there is an intention to help persons to buy new vehicles, by all means go head and reduce taxes on new vehicles but do not interfere with the small man rights to import an eight-year-old car.
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
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