THE grace period on taxes granted by Finance Minister Colm Imbert for new and foreign-used car dealers is no Christmas gift, says president of Trinidad and Tobago Automotive Dealers Association (TTADA) Visham Babwah.
Babwah is seeking a further tax extension for new and foreign-used car dealers until January 31, 2021.
Imbert granted dealers until December 31, further to his October 5 budget announcement that tax concessions will be removed on foreign-used vehicles by October 20.
He announced that Cabinet has agreed that the new taxes would take effect on January 1.
Babwah told the Newsday on Tuesday, “This is not an extension. This is not a Christmas gift.
“I want the population to know when the tax was exempted and the law was assented to by the President in 2016, the date of expiration of this tax was December 31, 2020. The law stated that.
"We never operated outside of the law, so the minister did not give us any special consideration or special favour when he moved the date back to October 20 and then moved it forward to December 31.
“In my view that was really a distraction for dealers, and it will cost the dealers a lot of money.”
He explained the removal of tax concessions and now the extension of the date has changed the focus of the dealers, whose eyes were on making representation after December 31 to have an agreement for the permissible age of imported vehicles to remain at three years, to maintain the current importation quota and to seek a reduction in taxes for larger electric and hybrid vehicles with 159 kw engines and over.
“In fact, he is taking from us, because dealers have purchased vehicles which cannot be shipped because of the change in schedule due to the pandemic. It means when those vehicles arrive here, after the expiry date, dealers would have to pay additional taxes upwards of 45 per cent.”
Babwah said dealers have come to the conclusion that this could be the demise of their industry.
“When the minister made the announcement in the budget, we had vehicles purchased and unable to ship because of the pandemic. The minister knew the next available vessel would have left Japan around October 15, so all dealers could not ship their vehicles because of the threat of additional taxes.
“If you have vehicles parked up and you can’t ship it because of the high taxes, you won’t bring them in. With the new extension date, dealers are now struggling to get their vehicles on another vessel, which is near impossible, because the one vessel is leaving Japan somewhere around October 28 and dealers are unable to get their cargo on that vessel.
“So we are calling on the minister to change the exemption date to the end of January, because that is the time vehicles would be arriving here.”
He said that was not a discussion they had had with the Prime Minister, Minister of Trade or Imbert because it was not an issue before.