TARIQ Malik, vice-president of the Jamaica Used Car Dealers’ Association (JUCDA), feels recommendations sent to Finance Minister, Dr Nigel Clarke, in early March could assist in jump-starting the sputtering sector and, by extension, the economy.

The used-car sector, which experienced its best year in 2019, is currently being pummelled by spin-offs associated with the novel coronavirus (COVID-19).

“The sector is suffering in a massive way; up to 90 per cent sales were hurt… For some dealers, it was up to 95 per cent downturn in sales,” he told Jamaica Observer’s weekly Auto magazine.

According to Malik, JUCDA proposed that the General Consumption Tax (GCT) be reduced for commercial importers from 20 per cent to 15 per cent.

“We haven’t heard any word from the Finance Minister… But we believe that commercial importers of cars should not be expected to pay a much higher GCT at the port of entry than a non-commercial entity. In other words, GCT is currently 15 per cent but we have to upfront the 20 per cent and that five per cent has an aggregate effect. It’s harsh on our pockets. Yes, we can claim back that amount of money but it takes years to get anything back from government. It puts an extra strain on the business to find that money,” said Malik, who is also principal of Old Hope Road-based Carland.

“I am of the opinion that the duty regime should be reduced so to create more activity in the market because cars are the biggest revenue for the government. And they must be seeing how it is now, because nobody is importing as it is. So if they reduced it, it would become more affordable and we would sell a lot of cars as more people would be able to afford it and generate activity in the market,” he continued.

On April 1, GCT was reduced from 16.5 per cent to 15 per cent. The new GCT rate was published in the Jamaica Gazette dated March 30, 2020, titled The Provisional Collection of Tax (General Consumption Tax) Order 2020.

In announcing the reduction, Clarke had noted that this was the first cut in the GCT rate since it was introduced in 1991 that was not accompanied by it being applied to other areas.

Malik also feels the government should encourage the importation of environmentally vehicles as a tool to reduce the demand on foreign exchange.

“We also feel strongly there should be a lower duty regime for fully electric and hybrid vehicles. Rate of duty on those cars is now at 45 per cent, but we think it should be reduced to at least 10 percentage points. These vehicles are so fuel efficient and environmentally friendly and it will ease the burden of our foreign exchange bill on our oil imports,” he told Auto.

In 2018, Jamaica’s fuel bill stood at approximately US$1 billion.

With a membership of 195 dealers, JUCDA currently employs 6,000 persons directly and 3,000 indirectly. Headed by Lynvalle Hamilton, JUCDA imported more than 40,000 vehicles in 2019; the highest amount in the last 10 years.

An automotive engineer by profession, Malik is marking 35 years in the automotive sector. He feels his expertise has set him apart from other players.

“I started with two cars in 1985. We have grown over the years, this is my core business. The variety of cars we offer has been really different from everybody else and our one-year warranty has been a signature warranty… I have the expertise to buy right. I know the things to look for in buying a pre-owned car… I’m hands on in delivering top-quality cars. And for the past four years, I’m joined by my son Moaz; so it’s a family business,” he said.

“Last Sunday, we started a 30 per cent-and-beyond sale on all our stock of more than 700 cars. It will go on for the month of June. You name it, we have it. This is no gimmicks; all top-quality vehicles,” he added.