Rick Lowe
After the recent budget announcement and the increases in import taxes on automobiles The Bahamas Motor Dealers Association were given an opportunity to meet with Prime Minister Ingraham to present their case.
Basically the vehicle import duty, or excise tax as it is now known, was amended from five categories based on the CIF price (cost, insurance & freight) to two categories based on engine size.
It is understood the governments intention, beside bringing the debt under control, is to get Bahamians to drive more fuel efficient vehicles. Both noble desires for sure.
However, to move the majority of vehicles sold by local new vehicle representatives from paying 60% import duty to 85% excise tax was a death knell for the majority of vehicles sold in The Bahamas by the various manufacturers, particularly in a declining economy.
Mr. Ingraham was most gracious with the BMDA members and requested data to help him look at our situation without making any promises in light of the tough economic times.
To his credit, he reviewed the request of the BMDA and yesterday announced that instead of two tax categories the government would facilitate three. They are:
1. 65% for vehicles powered by engines up to 2.0 litres
2. 75% for vehicles powered by engines over 2.0 litres up to 2.5 litres and
3. 85% for vehicles powered by engines over 2.5 litres and commercial vehicles
When the price of a vehicle is increased so dramatically, down payment requirements increase, payments increase and insurance premiums increase we remain concerned that these rate hikes will further slow the market for new vehicles.
These are the most difficult economic times I've lived through, and while I'm grateful for the rate change to slow the haemorrhaging that the 85% rate would have caused, by adding the new category of 75%, I remain convinced that increasing taxes at this time is not the right move for the economy overall.
At the end of the day, the private sector and taxpayers are being called upon to bear more of the burden they have been carrying for the past couple years.
Obviously, the Prime Minister has overwhelming concerns for the entire country so we all hope the best for the country.
I think we need more than hope and prayers Rick.
It all still amounts to a significant price on new cars, whether new used small engined or large.
If they had lowered the duty on 2 liter engined cars to say 25-35% you would see some sales, agreed? But, this does not bode well for trafic in the capital.
In this situation, they are truly between a rock and a hard place.
However, had they paid attention to the Checci report of 1968, we may well have not had the tremendous traffic we now have, or at least have had a decent public transport system.
Has the Government now also backed off of the manufacturers?
The tabled Doc reads that if you’ve had the concessions for 5 or more years, it is over.
If you have had it for less than 5 years, it ends at 5.
I now hear some fazing in of incremental duty might happen, you know, to prolong the death of manufacturing.
What a missed opportunity hey?
They could have done something right for a change….
You’re right of course Chris.
If we had taken baby steps a decade ago (didn’t have to go back as far as the Checchi Report) we would probably have been okay now, but when the political class keeps encouraging Bahamians to believe there’s something for nothing, we get what we have.
I watched You Tube video the other day of a recent interview with several PLP’s about the budget, and they are still harping on about National Health Insurance.
Could it be blind ignorance or just plain shit stirring?
I find I get royally annoyed with the small things, with situations like this I seem to go through shock, then seeing the reality and then looking for potential solutions.
Can you guess which stage am I at? :0)
Blind Ignorance AND Shit Stirring.
Mind you, if that is ones forte…
But, a telling statement, you’re looking for solutions.
That is what we do. Always.
Abstract thought, coupled with rational thought, to the 5th consequence.
How do we teach them that?
It is either real and possible, or we don’t do it.
If we proceed, we perish.
Cause and effect.
Et al.
When I was in the Chamber, there was nothing I did, that wasn’t for the common benefit.
Nothing for me. Wasn’t what I was there for.
If it is for me, I’ll go get it.
Correction, earn it.
Create it. Develop it.
Certainly not pillage or steal it.
By the way, I had thought that there may be some benefit to the Gulf disaster for the Bahamas, boating wise but I have heard that, like the west Fla/Alabama/gulf coast stopping recreational fishing/boating, East coast Fla is considering the same. No Boat can leave its slip or travel more than 3 miles offshore.
That means NO U.S. boats can cross the stream.
Uh Oh.
I’m investigating further.
It is a terrible disaster for all of us, and I’m sure we will get some, even if only hard tar balls.
Bad to worse.
Absolutely.
On the oil spill. Now there’s a tragedy I have not had enough time to think about.
I do know we can’t do without oil at this stage.