Gov’t settles on 10-year age limit for GCT on used cars
THE Government has decided to increase the age limit of second-hand sale vehicles to which General Consumption Tax (GCT) applies, from eight to 10 years, to earn $26 million in revenue this year.
The change, which became effective on April 1, forms part of the $6.6-billion tax package announced by Minister of Finance and Planning, Dr Peter Phillips, in the House of Representatives last Thursday.
As Phillips noted, the decision followed extensive discussions at the level of the Special Select Committee on Tax Measures in February. He also explained that while the age of the vehicles has been extended, the rates which were amended in 2012/13 will remain as is.
During the meeting, Opposition MP Karl Samuda was of the opinion that the Act should be amended to reflect "less than 10 years" instead of "10 years and under".
Samuda said that as a member of the former administration, he had occasion to increase the age of vehicles permitted and recalled that the 10-year benchmark was an important consideration.
"Apparently, suppliers of vehicles 10 years old in the United States carry a much more attractive price, so that they are able to get them at cheaper prices. I am saying that it should be under 10 years," Samuda suggested then.
Phillips, who chaired the committee, said that he had no real position on the suggestion.
Following the meeting, it was decided that consultations would be held with players in the used car industry on the issue. The proposal was one of several contained in the Blueprint for Tax Reform which was being examined by the committee.