If the tax exemption cap of $350,000 proposed by Prime Minister Dr Keith Rowley is implemented, the list of cars considered luxurious that can be purchased without exemptions could be significantly reduced for Members of Parliament and other public officers who are entitled to the exemption.
Guardian Media spoke with an automotive dealer concerning the vehicles that could be purchased without crossing the $350,000 threshold and the dealer confirmed that most Range Rovers, Jaguar, and Porsche were essentially ruled out by default. The dealer said, however, there were many variables that could raise the tax on the vehicle such as engine size and features.
According to a quick check of car prices of local dealers for various brands, traditionally favoured luxury vehicles for MPs such as Range Rovers, Porsche and the fairly commonly used Toyota Prado would all draw taxes that fall well outside the exemption.
For example, the Range Rover Sport recently purchased by a Government Member of Parliament would exceed the $350,000 exemption based on the Custom Duty on the vehicle alone, which was listed at $367,000. With the exemption in place, the MP would pay $228,000 in taxes for the vehicle, as the VAT on the car tallied $184,000 with the Motor Vehicle tax set at $134,000.
However, the $350,000 exemption does not exclude the possible purchase of luxury vehicles outright, as the Prime Minister pointed out a “fine car” can still be bought within that exemption.
He was speaking from personal experience, as Guardian Media learnt the Mercedes Benz purchased for his use tallied just over $350,000 in taxes. Value Added Tax was listed at $82,000, Motor Vehicle Tax at $80,000, and the Custom Duty was listed at $190,000 taking the overall tax on the vehicle to an estimated $352,000.
The Ford Mustang owned by Minister of Terrence Deyalsingh would also fall within the exemption as the taxes on the vehicle tallied to just under $300,000.
The Prime Minister announced his plan to approach cabinet with the proposal, amid growing public concern about the amount of tax exemptions enjoyed by Parliamentarians following the announcement by Minister of Finance Colm Imbert that concessions for motor vehicles purchased by the public would be removed in a bid to reduce foreign exchange expenditure.
The Finance Minister said over US$400 was spent on car imports last year.