JAMAICAN purchasers of electric vehicles will benefit from a further 20 per cent reduction in the current import duty rates and will not have to pay motor vehicle licence fees over the next five years.

The House of Representatives on Tuesday approved the Customs Duty Tariff (Revision Amendment) Order 2022; the Road Traffic (License Duties) Order 2022; and the Road Traffic (Licence Duties) resolution, which will bring the changes into effect. The reduction brings the import duties on electric vehicles down to 10 per cent from 30 per cent.

These lower duty rates and the elimination of the licence fee requirement will apply only to vehicles that are three years old or less at the time of importation and took effect on July 14. Finance Minister Dr Nigel Clarke advised that people who have already paid licence fees for this year can claim for the excess amount paid up to the effective date.

He explained that the Government is supporting the transition from the country’s high dependence on petroleum for motor vehicles by making it more affordable for Jamaicans to buy electric vehicles.

“The electric vehicle technologies are undergoing rapid change and so the public interest is best served by ensuring that the latest technologies are preferred over older technologies. Having 10-year-old electric vehicles in the country doesn’t help anybody, we need the latest electric vehicles at any point in time…we want vehicles no older than three years old,” he stressed.

The finance minister noted that duties on motor vehicles are a major source of Government revenue, representing about $30 to $40 billion of its annual revenue, but based on consultations with the Ministry of Science, Energy and Technology; the Inter-American Development Bank; and other stakeholders, the decision was taken to implement the fiscal incentives as the best way to encourage people to purchase electric vehicles. “… So the way we treat with the reduction of duties for electric vehicles has to be considered very carefully. At the same time, we must make a start in the transition,” he pointed out, adding that the waivers are a significant concession to help Jamaicans transition to battery-powered electric vehicles.

Dr Clarke stressed that the Government was signalling strong commitment to the public that it wants electric vehicles to make up a significant percentage of the country’s vehicle type in another eight years.

But Opposition spokesman on energy Phillip Paulwell said most will not benefit as only a certain segment of the society will be able to take up the incentive.”

I fear that what we are doing is a continuation of the haves getting more than those who don’t have. Eighty-five per cent of the vehicles that are coming into Jamaica now are used vehicles between four and six years old. There is no way you’re going to get the amount of vehicles you wish by limiting the incentives to three years. Those vehicles are still too expensive for working-class Jamaicans, and if they’re not a part of this, it’s going nowhere,” he said.

Paulwell also argued against the three-year limit, pointing out that electric vehicles older than three years will not present the same level of challenges as a combustible engine vehicle. “An electric vehicle is superior technology. If you’re going to limit the incentive let us limit it by virtue of the price of the vehicle,” he suggested.