Sinckler answers car dealers’ call

Government today moved to Parliament to raise the chargeable value from $55,000 to $60,000 on motor vehicles, following complaints from car dealers that the recent hike in National Social Responsibility Levy (NSRL)  had driven the cost of mid range vehicles out of the reach of ordinary Barbadians.

In tabling the Excise Tax (Validation of Tax) Motor Vehicles Bill in the House of Assembly this afternoon, Minister of Finance Chris Sinckler sought to assure that Government would still collect its share of revenues from the NSRL, which was increased from two to a whopping ten per cent on July 1 this year.

However, it is expected to result in an immediate lowering of revenues from excise taxes on motor cars even though Government expects to more than make up for the expected shortfall by way of higher sales of mid range vehicles, which, with the increase in the NSRL, were said to costing as much as some luxury range vehicles.

“So to avoid that effect the dealers and the Barbados Revenue Authority . . . said the way you adjust that, the way you avoid that problem is to move the chargeable value up from $55,000 to $60,000. So you change the band for the vehicle and allow then the landed value on the excise, in spite of the increase in the NSRL, to remain basically within the range of what we would call a mid-range affordable vehicle,” Sinckler explained.

“That, the BRA has advised, can be safely done without compromising any of the revenue . . . to the Government and interrupt any of the projections which we have made unduly. So having seen that, the Ministry of Finance said once we can get what we have projected to get, then we see no reason why we could not allow the chargeable value to go up from $55,000 to $60,000,” he added.

Pointing out  that such a move was done in the past, Sinckler said it was never Government’s intention to dramatically increase the cost of vehicles by way of taxes.

The rate of excise on imported vehicles is calculated based on the chargeable value which is based on the cost of insurance and freight plus import duty, plus NSRL and Value Added Tax if applicable, plus the size of the engine.

Currently where the vehicle engine size does not exceed 1,600cc and the chargeable value is below $55,000, then the excise charge is 46.95 per cent. If the capacity is less than 1,600cc but the chargeable value is greater than $55,000 then the excise rate is 64.35 per cent.

“If the engine capacity is more than 1,600cc and the chargeable value does not exceed $55,000 the excise tax moves to 76.34 per cent. And where the engine capacity is more than 1600cc but less than 1800cc and the chargeable value exceeds $55, 000, the excise tax then moves to 93.7 per cent,” the Minister of Finance said, as he gave an idea of the taxes that were being paid.

“Finally, where the engine capacity is over 1,800cc and the chargeable value exceeds $55,000, the excise tax rate moves to 120 per cent,” he added.

The resolution, which was approved, also called for a validation of previous adjustments, which Sinckler pointed out were done under administrative order from his ministry.

“On investigation the Chief Parliamentary Council thought it was tidier and more legally certain to have this enshrined in legislation by way of effecting an amendment to the Act and adjusting regulation by way of order to ensure there be any avoidance of doubt and we agree,” he said.

14 Responses to Sinckler answers car dealers’ call

  1. Alwin Ellis
    Alwin Ellis December 20, 2017 at 4:55 am

    I hope when DODDS call he will also answer to the charge

    Reply
  2. Don Keyote December 20, 2017 at 5:32 am

    “Sinckler said it was never Government’s intention to dramatically increase the cost of vehicles by way of taxes.”

    Lockjaw ought to be the punishment for lying. If it was, we wouldn’t have to worry bout Sinckler no more.

    Reply
  3. milli watt December 20, 2017 at 5:42 am

    big business and big government equals TRUMP DEALS and me cruel as RH…….cannot get my taxes owed to me year on year for the last 4 years but these clowns could sit over drinks, golf and hammer this out.

    Reply
  4. Alex Alleyne December 20, 2017 at 6:33 am

    This decision was made at a combination of car racing and Polo.
    “ECONOMIC POWER, POLITICAL POWER”.

    Reply
  5. Sue Donym December 20, 2017 at 7:32 am

    But look a little closer…
    What is the effect of the crushing excise tax levels plus NSRL on vehicles over 1600cc. While it will capture what may be called luxury vehicles, it’s going to be felt by taxi operators – crucial to the tourism sector, but having no ability to adjust fares, and no sweetheart concessions. Then, the route taxi and minibus operators who will be forced to maintain the passenger fares at the rate of $2… and they’re already reeling from the price of parts and fuel – and the inability to claim any VAT offset.

    Then again, Jester said once Bajans still buying cars, we’re good.

    Reply
  6. Lee December 20, 2017 at 10:04 am

    WAY TO GO. We don’t need any more foreign exchange guzzling cars on the island. Let’s start using golf carts, pedicabs and scooters like they do in Bermuda !! They are easier on the road surface too !!

    Reply
    • Richard Johnston December 20, 2017 at 10:54 am

      I will ring your pedicab service the next time I need to get from Coles Pasture to Broad Street.

      Reply
    • Sue Donym December 20, 2017 at 11:14 am

      Okay @Lee, you do know that we don’t make golf carts and scooters here. Let’s do the calculation now for when next we have 5 or 6 huge ocean vessels. How many do we need for say, 10K to 12K passengers that might come ashore? How much FX is that? Electric, biofuel or regular – more FX. About those road surfaces: how do you think they’ll feel about bumping around and dodging potholes in golf carts as they make their way to the caves and historic churches?

      Reply
  7. archy perch December 20, 2017 at 10:58 am

    Things so hard in Barbados, but I see every five cars is a $110,000 SUV. Not many older cars on the road.Things hard.
    It seems to me that Barbadians are living way above their means and are blaming the government for their unfortunate situations.
    Building the biggest houses for two people with rooms and stairs you don’s need. Ridiculous.

    Reply
  8. Randolph December 20, 2017 at 12:06 pm

    Archly Perch,wanna want all the big houses and expenses cars?What a wicked bunch.

    Reply
  9. Ossie Moore December 20, 2017 at 1:37 pm

    All o’ this tax and what I can see is a N.S.U moped looking at me wid a winki eye.

    Reply
  10. Archie Harvey December 21, 2017 at 4:16 am

    Nice article on Car Finance Deals and I really appreciate it for sharing as this article is very informative and helpful 🙂

    Reply

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