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Pickup and hybrid boost

BY BALFORD HENRY Senior Staff Reporter balfordh@jamaicaobserver.com

Friday, May 02, 2014    

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LAST year, major concerns were raised in the local motor vehicle market about a hike in the common external tariff (CET) duty imposed on pickups.

The market could not understand why the Government would increase the duty on imported pickups (vehicles over 2000 cc) from 20 per cent to 30 per cent, for example, in midst of its efforts to rejuvenate agricultural production which had been levelled by Hurricane Sandy in 2012.

As chairman of the Automobile Dealers Association (ADA), Kent LaCroix suggested then: "Pickups are the work horses of the productive sector and the end consumers would have to bear the brunt of the taxes."

Well, this year the Government finds itself having to rectify the situation not only as it affects pickups, but also hybrid motor vehicles.

Hybrid vehicles use two or more distinct power sources to move the vehicle. The term most commonly refers to hybrid electric vehicles (HEVs), which combine an internal combustion engine and one or more electric motors. However, other mechanisms to capture and utilise energy are included.

Unfortunately, Minister of Finance and Planning, Dr Peter Phillips failed to announce the benefit for pickups when he opened the budget debate on April 17. However, he made the correction when he closed the budget last Wednesday.

"Because of an oversight, pickups were not specifically mentioned in our original announcement," he noted. "I want to emphasise that pickups will be included".

"I also want to make it clear that hybrid vehicles, which were not specifically included, will not attract a special consumption tax, because we want to encourage energy conservation and the use of new automobiles technology," Dr Phillips told the House of Representatives.

According to the Ministry Paper he tabled in Parliament, there will be a modification of the special consumption tax (SCT) rate by 10 percentage points for petrol/diesel vehicles over 3500 cc and hybrid vehicles as follows: vehicles exceeding 3500 cc (diesel and petrol) will move from 30 per cent for petrol using vehicles to 20 per cent, and the diesel- using vehicles will move from 23 per cent to 13 per cent; for vehicles exceeding 3500 cc (diesel and petrol), petrol-using vehicles have had their duty reduced from 40 per cent to 30 per cent and diesel using vehicles from 30 per cent to 20 per cent.

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