Car prices to jump
JAMAICA’S car import umbrella groups are concerned about the effects of the hike in Common External Tariff (CET) duties which becomes effective today.
Last Thursday, Finance Minister Dr Peter Phillips announced a raft of measures to raise $23.4b in taxes. The CET on motor cars and SUVs over 2,000cc will be increased by 10 percentage points to 30 per cent.
The new-car import group — the Automobile Dealers Association (ADA) — said the government’s move will see prices of vehicles increasing from $350,000 to $1.5 million on each unit.
“We are very concerned,” said Kent LaCroix, ADA chairman. “We had given proof to the Government that a reduction in duties translated to the generation of more revenue for them.”
LaCroix said the ADA was awaiting clarification from the Ministry of Finance as to whether pickups and 2.2-litre diesel vehicles would now also be taxed.
LaCroix’s used-car counterpart, Lynvalle Hamilton, said he understood the Government’s position. However, the ripple effect would pose challenges for consumers.
“A number of our members are unhappy with the timing of the new CET. Some dealers had placed orders for customers prior to the announcement and will have to revise their prices. In fact, some customers are saying they cannot afford the adjusted prices. The market should have been given more time to make plans for the adjustments,” he said.
Hamilton said with the addition of the CET duties, the prices for imported used cars would move up by $100,000 to $200,000 per vehicle.
“And depending on whether CIF (cost, insurance and freight) is also applied, a unit could cost an extra $1 million,” he continued.
Today, the government will also seek to raise $600m in revenue by increasing motor-vehicle licence plates, as well as fitness and registration fees by 50 per cent.