As Banks DIH Limited ventures into the automotive industry, one of its executives has urged the Guyana Government to consider lowering taxes on new vehicle imports to make them more affordable for the public.
Engineering Services Director, at the beverage giant, Shabir Hussein made the call on Friday during the commissioning of the company’s newest subsidiary, Banks Automotive and Services Incorporated (BASI).
“Perhaps it would be worth considering a revision of the tax laws by reducing the taxes on new vehicles and increasing the taxes on old and used vehicles,” Hussein suggested while explaining the advantages of increasing ownership of new vehicles on the country’s roadways.
He argued that used vehicles generally have a life cycle of six months, after which, they can become unreliable and result in owners spending large sums of money on spare parts. He added that used vehicles can become environmental and road hazards.
“…smoking heavily, breaking down on the roads, or on the Demerara Harbour Bridge, causing serious pains to those commuters in line behind the wreck…,” he outlined, adding that “the only happy partners in the used car business are the spare parts businesses.”
In contrast, he said new vehicles have a minimum of a ten-year life cycle and bring several benefits including “no stress, great comfortability”.
But President Dr Irfaan Ali, who delivered the feature address, explained that the used vehicle industry thrives because of their affordability.
“There is an affordability index…we also have to see how companies who are bringing new vehicles…can integrate your product into the affordability frame of the population at this point,” he said.
He also indicated that the government has to carefully consider its revenue base.
“Someone could come in and say, well, ‘now you’ve reduced the cost of energy by 30 percent, with all the investment you’re making, your production cost will go down. So, you want to reduce the cost of beer?’ But things are not so simplistic,” President Ali pointed out.
He continued, “Just translate that to being in government and looking at everything that we’re doing to reduce cost, increase disposable income, and then you might be of the mistaken belief that when you build competitiveness, automatically you can make certain decisions that erode the revenue base of the country.”
“And yes, whilst we’re having a lot of revenue coming in, and we will have a lot of revenue coming in from oil and gas, that has to be used to expand the competitiveness of the rest of the economy, so you widen and diversify the revenue base and stream of the country and then address vertically all the other issues which include the taxes, and all of that will get better,” the Head of State said.
