Auto dealers call for review of tax structure

Last Updated on Monday, 8 February 2016, 14:20 by Denis Chabrol

vehicle_priceGuyanese auto dealers Monday called on government reconsider the import restriction on vehicles four years and older, saying that the tax structure on new vehicles would end up making it more expensive to acquire a car.

“We the auto dealers of Guyana respectfully ask that the tax structure be reconsidered so that the perfect balance can be found between revenue earning, newer models and affordability,” said the Auto Dealers Association of Guyana.

The association called on government to consult with the relevant stakeholders to “find the perfect balance that meets the needs of all.”

While the import taxes on vehicles newer than four years old with 1500 CC engines have been reduced by 68 percent and the import taxes on those with 2000 CC engines have been slashed by 85 percent, the association argued that the actual cost of the vehicles plus the new taxes would make acquiring such vehicles prohibitive.

“The import duties paid on these will in most cases still be way higher than the current flat rate structure taxes that we currently pay on vehicles that are older than  four years old , and since the purchase cost overseas will be higher
( based on the newness ) and the import taxes will be higher it’s obvious the cars will be much higher in overall cost and thus be out of the reach of the average Guyanese,” the association said in a statement.

According to the association noted that the most stocked and affordable vehicles are between the years 2002 and 2010 most of them ranging from GYD$2 million to GYD$3 million for those made from 2002 to 2007 and few between GYD$3 million and GYD$4 million.

The Association reasoned that with the proposed import restriction would result in Guyanese paying a minimum of GYD$3 million for a vehicle “which knocks out the most purchased and afforded models currently in Guyana.”

Vehicle owners, the association argued, would now find it even more difficult to pay their monthly installments to either banks or auto dealers because already they “barely qualify and barely make the necessary payments.

“Now to ask them to increase the acquisition cost to three million upwards , will either make it too expensive for them to afford or force them to sacrifice financial resources from other key aspects of life in order to afford a vehicle which has become a necessity for many,” the auto dealers said.

With regards to maintenance cost, the Guyana Auto Dealers Association contended that the older older models of pickups have stronger suspensions that work well in the hinterland, and the newer model canters/trucks suffer from diesel fuel pump problems compared to the newer models with electronic diesel fuel pumps that are mostly un-serviceable locally.