Review of taxes on vehicle importation likely – Jagdeo

Vice President Dr Bharrat Jagdeo today said the government could conduct a review of the current tax system involving the importation of vehicles.

Responding to questions during his press conference, Jagdeo said “we’d probably put them under review in the next term in office.”

This, he indicated, would be in keeping with the expansion of road networks across the country.

“…as the road network expands too, I think we can allow a more liberal taxation system on the vehicles,” he said, admitting that the “duties are still high” despite several interventions from the government over the years.

However, he explained that the current system is not discriminatory.

In a move to incentivise the transition to lower-emission vehicles in Guyana, the government in 2023 removed the Value Added Tax (VAT) on new electric vehicles.

During his presentation of Budget 2023, Finance Minister Dr Ashni Singh had explained that this measure applies to new (less than four years old) electric motor vehicles – not hybrid – of any power rating.

Further, to support the investment decision of businesses to switch to more environmentally friendly vehicles, the Finance Minister had also announced an increase in the writing down allowance applicable to all-electric motor vehicles to 50 per cent annually.

According to Dr Singh at the time, the ownership of a motor vehicle is no longer considered a luxury since it improves the ease of access to and from the places of home, work, and learning.

Consequently, he had announced additional measures to reduce the cost of motor vehicle ownership.

These included the reduction of the duty on the importation of new (less than four years old) motor vehicles below 1500 cc from 45 per cent to now 35 per cent. This reduced the cost of importing such a vehicle by approximately $200,000.

In addition, the then tax rate on used vehicles below 1500 cc (4 years and older) was replaced with a flat rate of taxes of $800,000. This reduced the cost of importing such a vehicle by $300,000 on average.