Feb 02, 2016 News
Government has assured car dealers and used tyres importers that they will be given time to sell out their stocks before a planned ban and age restriction is implemented.
Responding to questions yesterday, Minister of Finance, Winston Jordan, assured that the notices as announced in his 2016 National Budget presentation on Friday are all part of the plans by the administration to ensure that the quality of life of Guyana is taken to the next level.
There are scores of used car importers and used tyres dealers scattered across the country.
The announcements sparked concerns about the impact on the livelihood of the businesses and employees.
An estimated 10,000 vehicles are being imported every year after local banks relaxed their interest rates within the past few years, making it affordable for the working class to buy cars.
On Friday, Jordan announced that there will be a removal of the Excise Tax on motor vehicles that are under four years old and 1500cc. These vehicles currently attract Excise Tax at the rate of 30 percent with an effective tax rate of 118.7 percent. With this removal, Jordan explained, the effective tax rate will be reduced to 68.2 percent.
Another major impact from the budget would be the reduction of excise tax from 50 percent to 10 percent on motor vehicles under four years old – that is for vehicles between 1500cc and under 2000cc. The effective tax rate of 152.3 percent for this category will be reduced to 85 percent.
From May 1, the Finance Minister also announced, there will be restriction on the importation of used and/or re-conditioned vehicles older than eight years old from the date of manufacture to the date of importation.
He also signaled the intentions by Government to ban the importation of used tyres and to reduce taxes on new tyres to encourage their use.
“This ban will be put into effect as soon as some procedural hurdles are cleared,” he said.
Speaking to reporters at his Main Street office, yesterday, Minister Jordan made it clear that the motivations for the changes were done with the intentions to “green” the economy – clean the environment and generally to ensure safety for citizens.
He also pointed out that the importation of newer, modern vehicles will also positively impact on maintenance costs for the owners.
He stressed that it is a fact that used tyres have a shorter lifespan than newer ones. Used tyres sometimes barely make it to three months, and there are also the issues of safety concerns.
A number of deadly vehicular accidents in the past have been blamed on used tyres.
Jordan stressed that dealers and tyre importers, and retailers will be given time to adapt.
It is a fact that many dealers still have vehicles since from the 1990s in their inventories so the impact is more of long-term one, Jordan said.
Recently, the Guyana Revenue Authority (GRA) attempted to sell several vehicles left on the wharves for a number of years, but in vain.
Newer vehicles will spell a longer service to the owners, the minister said.
“I gave notice that we are going to ban tyres. I said there were some procedural hurdles and once we clear those hurdles it will get implemented. We will give adequate notice…If you have stocks…well they are here… The ban is essential on imports.” (Leonard Gildarie)
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