Energy Chamber: Car tax won't reduce foreign exchange demand

Put simply, the Ministry of Finance’s plan to increase taxes on cars to reduce the demand for foreign exchange will not work, especially when it comes to electric vehicles.

This was the position of the Energy Chamber of TT, shared by chairman Dwight Mahabir during his opening remarks at the Chamber’s Energy Efficiency and Renewables Conference on Monday morning.

He said, “We have noted the recent increases in taxes on private hybrid and electric vehicles, which we understand will be a policy measure aimed at reducing the demand for foreign exchange.

“Our preliminary calculations are that this policy will not reduce overall demand for foreign exchange with respect to fully electric vehicles which are powered from locally generated electricity from natural gas rather than imported gasoline or diesel.”

He said more on the matter would be shared in Wednesday afternoon’s panel discussion on energy efficiency in transport and said there would be relevant data presented there.

“Perhaps I could ask (Energy) Minister (Franklin) Khan and Minister (of Public Utilities Marvin) Gonzales to ensure that the respective technocrats take note of that data and should the data support our position, perhaps have a dialogue with the Minister of Finance about the issue.”

But Maharbir lauded the ministry’s decision to remove subsidies on fuel, saying that it was a policy change for which it had been lobbying.

“We are excited to know that this has finally come to fruition,” he said. “We are also supportive of the privitisation the fuel retail sector and the removal of fixed margins.”

Mahabir said while it seems TT is behind in the clean-energy race, the country has two solar energy plant projects in the approval phases, which he said will be talked about later on in the conference.

“(This) will leapfrog us over our Caribbean neighbours in terms of renewable energy capacity,” Mahabir said.