Increased vehicle prices and loss of jobs predicted as tax concessions removed

Home*Cover Story*News

Increased vehicle prices and loss of jobs predicted as tax concessions removed

“Since this government took office in 2015 it would appear as though they have a mandate to destroy the foreign-used industry in TT and make room for the conglomerate.

That’s the view of Visham Babwah, president of the TT Automotive Dealers Association, following the budget announcement on Monday that all tax concessions will be removed on the importation of private motor cars, effective October 20th and that from January 2021, the permissible age of imported foreign used cars will be reduced from four to three years along with a reduction in the importation quota by 30 per cent.

Babwah said the removal of tax concessions on the importation of private vehicles will have a serious fallout, as it will lead to increased vehicle prices and the loss of hundreds of businesses.

Finance Minister Colm Imbert said said these measures were put in place as there were too many cars on the road, which called for a rationalisation of the new- and used-car markets.
Imbert claimed the annual importation of about 250,000 private vehicles was causing a serious leakage of foreign exchange to the tune of some US$400 million.

Babwah, in an interview with the Newsday, said: “This finance minister is not really thinking about the effect of this. We are still in a pandemic. The car dealers are suffering. We have suffered low sales, and now he is going to create a lot of unemployment when government should be focused on keeping businesses up and running. Hundreds of businesses are going to be shut down overnight because of this.”

Babwah noted that back in 2016, this government moved the permissible age from six years to four years and that was a hard blow.

He explained that used car dealers invested heavily in training technicians to repair and service hybrid vehicles because the new-car dealers were not importing them. Babwah said now they have developed a market for the hybrid, “government has decided to come and put a final nail in our coffins.”

He predicted that a small car like the Aqua could see an increase from $75,000 to over $100,000.

Babwah said while it is a very difficult time for the country, government did not have to introduce all the taxes at once.