THE Jamaica Used Car Dealers Association (JUCDA) has called on Government to dramatically reduce taxes on (new and used) automobiles with a 1600 cc rating and lower, arguing that such a move would provide life support for the struggling motor vehicle industry while providing the state coffers with much-needed revenue.

Speaking at a press conference at the Liguanea Club in Kingston, JUCDA president Ian Lyn said that by lowering the tax rates, dealers can price cars within the reach of consumers, thus boosting sales and allowing Government to recoup more tax revenues from motor vehicles.

“Jamaica has one of the lowest GDP in the world but yet still consumers are buying cars two, three, four, five, six times [the price] you buy cars elsewhere in the world… this cannot continue,” Lyn said.

“On the flip side is that the government has not collected almost $2-billion worth of money in taxes because of a (significant) decline in the industry… common sense would tell you to radically reduce the taxes at once.”

The JUCDA is requesting that overall taxes charged on the importation of 1600 cc and under motor cars be reduced to 30 per cent — comprised of 10 per cent duties, 16.5 per cent GCT plus additional charges. This would be well below the current duty structure which taxes dealers close to 60 per cent to import vehicles in that category.

The ambitious demand is being made against the background of an industry which is reportedly in the doldrums. According to Lyn, with consumerspending adversely impacted by the recession, the industry has declined by 63 per cent year-to-year and dealers have had to be discounting heavily to make ends meet.

“Right now, used car dealers are making three per cent profit on average,” said Lyn, who added that new car dealers have been severely impacted as well.

“We are giving away vehicles… some dealers are selling vehicles for less money than they purchased the vehicle for to survive,” he said.

The development, noted Lyn, has forced some 17 used car dealers to shut down since the beginning of the year, and he added that many more are expected to fold if the present trend continues.

“With a 60 per cent decline and with over 30 dealers going out business by January 2010, something has to be done,” he said. “A very famous one is now on its way out and we expect others to follow suit.”

The JUCDA president said his association will be meeting with Finance Minister Audley Shaw next week and Industry Minister Karl Samuda at a date to be announced to discuss the proposal.

“We are not asking for money. What we are saying to (Government) is that we are going down, you need money, we have the cars, you want the money, this is what you have to bring the taxes to,” he said.