While dealers of new cars have welcomed the budgetary measure announced by Finance Minister Winston Jordan, last Friday, to reduce excise tax on imported used vehicles not older than four years, the measure has been utterly rejected by a vast majority of others in the industry and poorer class Guyanese in general.
This budgetary measure, which attempts to reduce the number of aged vehicles on the country’s roads, will bring little or no real benefits to low- and middle-income earners.
Minister Jordan, during his budget presentation, announced the removal of excise tax on vehicles under four years old and 1500cc.
This, he said, is part of the APNU/AFC Government’s measures in support of its programme of ‘greening’ the economy and protecting the environment.
Currently, these vehicles attract excise tax at the rate of 30% and an effective tax rate of 118.7 per cent.
Minister Jordan explained that, with this proposed removal of excise tax, the effective tax rate will be reduced to 68.2 per cent.
“The reduction of excise tax from 50 per cent to 10 per cent on motor vehicles under four years old, between 1500cc and under 2000cc. As a result, the effective tax rate of 152.3 per cent will be reduced to 85 per cent. Restriction of the importation of used and/or re-conditioned vehicles to under eight years old from the date of manufacture to the date of importation. This restriction shall be enforced from May 1, 2016,” Jordan said.
According to a report in one of the local daily newspapers today, several auto dealers commenting on this budget measure have condemned the move as anti-business and anti-development, noting that this “bizarre” move will not benefit the majority of Guyanese who will go for a low-end foreign-used car, older than eight years, which will cost an average of $3.1 million including taxes.
AUTO DEALERS’ OUTRAGE
According to the report, ne auto dealer said the proposal will only benefit the upper-middle class: “The average man, who buys a car, in majority of the cases, would take a loan from the bank and sometimes they are hardly able to get that loan of maybe $2.5 million or $3 million. So I don’t know how the government expect these people to be able to get a loan now for $7 million and $8 million. This I believe is to benefit friends and supporters and not the poorer people.”
Another dealer said while Government is talking about growing the country and jumpstarting the economy, it is in the same breath putting systems in place that will significantly dent the local auto industry, one which has made significant strides over the years.
“I am surprise they saying that the economy is struggling and they will put a stimulus in the budget to help the business community (but) low and behold this restriction on the age of used car importation. If we have to bring these cars which are so expensive, what will we sell them for, we will not make a profit and people will not be able to buy them. This decision will only kill this car business,” another dealer said, as he expressed frustration at what he termed “jumbie economics” being practised by the APNU/AFC Government.
Other dealers have accused government of satisfying the interest of a selected few, particularly those who are dealers in new vehicles.
Meanwhile, Leader of the Opposition Bharrat Jagdeo, told reporters during a news conference immediately after Friday’s budget presentation, that the ban on the importation of vehicles eight years and older will completely deny the poorer class of Guyanese from enjoying the luxury of owning a vehicle.
“Vehicles beyond eight years now will be banned, so a lot of vehicles that are coming into this country, they older and cost a bit more in foreign currency for the country because they are not as efficient etc, they are a bit more polluting, but at least a section of our population that is maybe middle income, lower middle income, poor can still afford something to drive; now they are not going to be able to with the banning of vehicles that are eight years old,” Jagdeo said
USED TYRES
As if to rub salt into the wounds of having to purchase newer vehicles at exorbitant costs, Minister Jordan gave notice of the intent 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,” Jordan said.
It is important to note that the announcement by government is a mere reduction in the taxes and not a complete removal. But, even in the case of a complete removal, a new tyre is more than 400 per cent more expensive that a used tyre.
Dr Jagdeo, commenting on this measure, said the banning of used tyres will significantly put at a disadvantage hundreds of poor Guyanese. Many businesses could also be forced out of operation, he said.
“Just imagine banning used tyres, how many people will be able to afford new tyres now? Most of the tyres that are used in our system are used tyres. From a safety perspective you need to properly look at the quality of the used tyers, but when you ban them completely you are transferring money into the pockets of the few people who are importing new tyres and you taking money out of the pockets of ordinary people who can only afford used tyres for their vehicle, so the cost of four new tyres, if you have to put on your vehicle, will be probably about 10-15% of the cost of acquisition of your vehicle,” commented Jagdeo, a former two-term President, Finance Minister and Moscow-trained economist.
older cars are not the cause of accidents almost all the accidents are cause by drunken drivers , speeding ,, overtaking ,,animals on the road or inexperience drivers who take chances older cars would definetly deprive poorer people to own cars
Ok.
Poor people should not accept cars rejected by other countries. They are unsafe and condemned by other countries and we accept them as good. Guyanese deserve better and will now get it. Ask why tax so high before? So only rich friends of ppp could drive new safe cars.
Kavita.
Who cares who you are, where you lived and what you do for a living? Each human being has a heart – feelings, a right to good health, food, shelter and luxury if afforded. U should be down right ashamed to express your view which shows total disrespect to the lower class and poor people in general. Noone wants to be poor but to live in comfort. The fact remains and is vivid for all to see that the present administration is doing nothing to improve the economy in Guyana but is driving the country into poverty. Let me leave u one question. How would you like to step into the shoes of those people that earn a monthly salary of $50,000 and cannot afford a vehicle? People are often blessed with more than others but that doesn’t necessarily make them any better than the other. Stop judging one’s intellectual ability.
I can safely say I have been fortunate but that never made me a heartless person. l have never looked down at those that don’t have. POOR PEOPLE ARE HUMANS TOO!!!
”……I am the one who made Rose Hall Estate the champion estate in the 80’s..” Can any one teacher take the credit for a child’s academic success?
There are so many others who played a part however little, in the entire process. But not YOU-swell headed trumpet beater. Whether it is so or not, you seem to be taking ALL the credit, ignoring the efforts of all the others that were involved.
You are living in the past. Car manufacturers have moved on since the days of the Morris Oxford or the box shaped Tapir that you MAY be familiar with. Manufacturers are now producing cars with ZERO carbon monoxide and other hazardous gases, in short ”green cars”. Car manufacturing provides jobs to ”millions” of people. In sales, advertisement, after care, mechanics, spare parts outlets, and simple car wash services, just to mention a few.
What you are doing is painting all dealers, mechanics etc with the same paint brush. It seems that you have a deep ingrained hatred for all and sundry who are in one way or the other connected with cars. May be, just may be you cannot drive or never owned a car or any other motorised vehicle.
Be fair and open minded. Think what would have happened had the car not been invented.
when you save you money bandit come and take all from you so is same square one back more poor people
Thank you for you response. No we have to make the poor people rich. Instead of spending the money on that which they cannot sustain they should be advised on using their resources in a manner that will ensure per capita high income dividend.
Make sense i think. You?
We have to create sustainable jobs to earn foreign currency. Not to ENJOY nice life based on government subvention but to work under small earnings and to railroad failures
Was away for a few hours. What do you understand of fruitful living. Please go to my Facebook and see what the powers to be has done to our future generations. My comment on owing a car was just a scratch on the wellbeing of our future generation. Like JFK said do not look upon what our country can do for us but what we can do for it. Because the longevity of our economic future lies not in owning a car but the foundational asset in being able to own thousands of cars based on our sensible investment in our education, our moral standing and our ability to cognitively exploit our resources to create continuity of our generations. Most of us sees only our present generation as the ultimatum. We have to look well into the future beyond us to understand the damages we can create by nonsensical investment.
We have to invest in a way that will secure the future.
No I am not a diplomat. But a traveller in military fashion across your planet.
I am more than you may think and most of all a guyanese.
If I am a BOSS without a B than I am the one who made Rose Hall Estate the champion estate in the 80’s. Go figure it out
every body talking about change but when it happens the don’t want accept it …..that’s human nature ……newer cars and newer tyres will definitely be better in the long term …atleast it will save poor people who paying dealers good money and borrowing money from banks for a crapy car with a goodlooking paint job on it ……
I’m totally agreeing with the coalition on this move.
This is so shameful. The taxes should be reduced all around. Only a very small percent of Guyanese can afford new vehicles. This is why they were bought more often. The poor are being left behind.
Ministers filling their pockets and killing & starving we poor people
KAVITA: ”I have lived in more countries and states of USA than any living guyanese had ever lived….”
Seems you are some kind of diplomat being posted from one country to another
Can’t be a diplomat if you moved from one state of the USA. to another. Who cares where you live /lived? That has nothing to do with car ownership and your experiences cannot be applied to all and sundry.( Rolling stones don’t gather any moss).
Back to car ownership. Millions of people own cars as a necessity. Like wise, millions own cars for pure luxury. What is so wrong if anyone wants to own a car for either of the two reasons as stated? Admittedly, owning a car incurs additional expenses like insurance, petrol/gas/diesel, maintenance in addition to a safe place to park once at home. All these add up.
Surely, before anyone buying a car, he/she would have taken all these into consideration before making such an important decision whether he/she can afford it both in the short and long term. Families who can afford it, want to enjoy the simple luxury of driving in comfort and at their own leisure for all their hard work and sacrifice. It’s a sure sign that a country is moving forward economically and people are beginning to have a better life style. Who doesn’t want that?
I can go on but that’s enough a response based on your criticism. You may be the BOSS but frankly, that’s without the ‘B’
Kavita therefore you’re saying that we should kill the poor people cause the got no reason for living???
Hi journalist and anni
what would a poor guyanese do with a car? Are u u thinking with the brainless head u sit on?
There are certain immediate expenses surrounding ownership of a motor vehicle. Where have u lived? Come on national TV and argue this with me. I have lived in more countries and states of USA than any living guyanese had ever lived. Come speak with the BOSS. TALK THE TALK AND WALK THE WALK.
well that’s where a lot of poor people place their X now APNU/AFC using the x as a bulls eye mark to stab the poor where it will really kill them……….. now i will not be able to buy a car and will stay getting wet when the rain falls an i am riding my bike………. 3 cheers to the oppressors 1 term in office they getting and never again i will never vote for them bye bye APNU/AFC
There are giving out bicycles when people want cars. I honestly hope these jokers are one term office holders.
am i missing something here if i purchase a vehicle between year 2016 and 2013 where by is cost me us6000 to get here in guyana and there is no taxes add to it how come it will be more?
can some one help me please
DENIED: Poorer class Guyanese might now never own a car – with Govt’s vehicle tax reduction, import ban measures
Forget about the poor cant have a car now..
Pretty soon those donkey cart owners will have to give it up too when they cant afford to pay PNC license fees..
But bet your life on it those big wigs whom support PNC financially will never pay a red cent in taxes now..Like the Mook man can now bring in more expensive vehicles for him and wife and pay no tax plus he will even get reimburse for what he paid during Sattaur time.
Just the opposite.!! ! The middle class Guyanese, which the PooPyParty and Cabal loved to call the poorer class, because they did everything to make us poorer, as they super enritched themselves.No the middle class which includes Public Sector workers and the Sugar industry workers, including,
cane cutters, will soon realize that brand new cars , seating 5,and with gas sipping, under 1600cc engines,and 3 year warranties, will be available for, three millionGuyana dollars, probably with higher purchase, available over 36 t0 42 months.They will then own a brand new reliable, warrantied asset, which they will be able to pay off in large part, with the hundreds of dollars a day in savings ,on the high cost of minibus, transportation, they are paying for every single day, probably over 300 days a year.Right now you basically get 10 years PLUS vehicles with Zero warranty, once it leaves the sellers lot, and big , some times ridiculous , repair and maintenence costs in the FIRSTyear of ownership.The used car dealers and their partners ,in the spare part stores, and unscrupulous mechanics, are a Mafia in their own right, and have nearly banktrupt many a used car owner.No they are the ones lying through their teeth, about new car ownership, and you know what, Government will probably benefit in increased taxes , while providing Guyanese with a far superior product.
About 20 years ago, even with the high tarrifs one new dealer, imported from India , a brand new 1200cc car, which was basicslly an old tech Toyata, with 3 year warranty, and sold it for just over two million,Guyana Dollars.It proved to be a reliable little car, but was so maligned and by also using, other meathod,s by used car and parts dealers, that it never caught on.The car was aTata.Today there are dozens of excellant, new, reliable brand, small cars, that can be imported into Guyana, and sold for three million Guyans dollars.
DO NOT LET THE GREED OF OTHERS DICTATE OUR FUTURE,.
Ok.
So what next.?where are we heading? How much more do our poor people have to endure?. Such shame .Everyone looks foward to improvment not failure.