Target for elimination

Judy Forde (centre) speaking at today’s conference.
Judy Forde (centre) speaking at today’s conference.

Used vehicle importers in Barbados say they have become a target for elimination from the local market.

Speaking on behalf of the Consortium of Used Vehicle Importers, a three-member panel told a news conference at Accra Beach Resort in Christ Church this afternoon that not only has a series of requirements and duties been introduced which made life “very difficult” for them, but that a certain border official continued to disrespect and intimidate operators in their industry.

The purpose of the news conference was to respond to allegations by the just retired Comptroller of Customs, Frank Holder, who accused the used car dealers of “robbing” the treasury through what had become an epidemic under-invoicing of the true value of imported vehicles from Japan.

Holder had told Barbados TODAY earlier this month that used car importers were declaring the value of their vehicles to be at least half of what they really were, so as not to pay the high port charges.

“In 2012 Japan reported that they sent used vehicles to Barbados with a value of $68,991,901, and then you had Barbados declaring, what came through Customs as some $37,401,709 in vehicles,” Holder had disclosed.

He had also stated that there were cars coming into the island, where people were declaring the value at US$3,000, US$5,000 and US$9,000, but that the true valued was US$60,000 and US$70,000, from Japan.

However, Trade Advisor to the Consortium, Judy Forde, insisted that the former comptroller’s figures were “grossly inaccurate” and challenged him to produce documentation to prove his claims. Forde questioned the credibility of his source of information from Japan, suggesting that the figures were gleaned from the Internet, but admitted that under-invoicing was a reality.

“The Customs Department, like all of us, is aware that under-invoicing is not unique to recon vehicles, or this sector or vehicles, or only from small business. Under-invoicing is also alive and well [with some new cars that are brought into Barbados] and big businesses who sell beauty products,” she stated.

Consultant, Erskine Durant suggested that if the former comptroller of customs’ figures were accurate, this meant that the landed value of a used car at the port would be close to $180,000.

“Based on the present duty structure of 150 per cent, that vehicle would clear the Bridgetown Port costing nearly $180,000 … because the excise is 45 per cent of the CIF and the customs duty is 46.95 per cent, the VAT is 17.5 per cent, the handling fee is $10, and when you add those onto the CIF of the vehicle, that would be the landed cost of the vehicle — $179,000 for a vehicle, not new, to be sold to a customer in Barbados,” Durant submitted.  The group, which represents about 10 currently active importers, has suggested that the customs department should instead send someone to Japan to see first-hand how the reconditioned cars were valued.

The consortium officials agreed that there was no effective system in place at customs to determine the true value of used cars, especially considering that those vehicles were bought through auction and therefore had no fixed price. Peter Phillips, an importer, suggested the introduction of a flat tax on vehicles based on their engine capacity as the solution to the under-invoicing controversy. Phillips argued that with such a tax in place, no one could under-invoice, because the department would know before hand the true value of each vehicle landing at the Bridgetown Port.

“This would rule out all the problems,” the used car dealer reasoned.

While conceding that some importers chose to undervalue their vehicles to survive, he did not agreed with customs labeling all operators in the same way.

The representatives of the industry also accused authorities of unjustly discriminating against the reconditioned car dealers, suggesting that the used cars were more reliable and of a better quality than the new ones. They gave example of new vehicles rusting out after “a few months” of being on the road, while the used ones, go for much longer. (EJ)


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