Cars older than eight years will be seized, disposed of, if imported – GRA warns
Months after Government restricted the importation of used cars older than eight years; authorities have warned that there will be little flexibility.
GRA has reminded car dealers not to order vehicles older than eight years old as there are restrictions now in place.
Yesterday, the Guyana Revenue Authority (GRA) reminded motor vehicle dealers and other importers, that the recent legislative changes to the Customs Act restrict motor vehicles that are eight years and older, from the date of manufacture to the date of importation, from entering Guyana.
This new law, GRA said in a statement, took effect from May 01, 2016.
According to the authority, it has already issued notices to this effect in the media.
GRA warned vehicle importers to desist from purchasing such vehicles and attempting to import same since vehicles, as these on entry will be forfeited and disposed of, in accordance with the provisions of the Customs Laws.
“Other fines and penalties may also be imposed. Importers should note that the restriction excludes heavy-duty vehicles, namely trucks, lorries, vehicles used in the agricultural and industrial sector and special purpose vehicles.”
Government has been arguing that the restrictions on cars older than eight years were to protect consumers, and are in keeping with the country’s plan to pursue a green economy. However, truck owners, involved in the transportation business, have complained that any restriction would make prices totally unaffordable.
GRA had explained that the measure was announced by Minister of Finance, Winston Jordan, during the presentation of the 2016 National Budget. It was subsequently presented in Parliament in February and assented to on March 14, 2016.
The restrictions are all part of a larger, long term “green” strategy to ensure that Guyana does not become a dumping ground for older vehicles. However, auto dealers had been urging Government to rethink those plans and to meet with them to talk about a new tax structure that would not cause hardships for stakeholders.
The Finance Minister had also given notice of the administration’s intentions to remove the excise tax on motor vehicles that are under four years old and lower than 1500cc. These vehicles currently attract excise tax at a 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.
It was widely felt that vehicles, especially the popular Toyota Premio and Allion sedan family cars, would become cheaper.
But not so fast, says auto dealers. Local car importers are asking Government to rethink its proposed tax change for used, imported cars, saying that an eight-year-old restriction will effectively drive prices up as the newer the cars, the more expensive they will be.
With many families depending heavily on the local banks for loans, the dealers had claimed that many workers are barely eligible for a $2M loan. And these are for the cheaper cars, more than eight years old.
