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Duty rate on cars cut, but ban on vehicles over ten years old

As of Thursday, May 28, 2015

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

PRIME Minister Perry Christie said the revenue performance of value added tax (VAT) since its implementation in January has opened the door for several customs duty reductions and some tariff eliminations to ease the burden on Bahamians.

During his 2015/2016 Budget communication in the House of Assembly yesterday, Mr Christie announced a 65 per cent maximum duty rate on vehicles down from the existing tax of 85 per cent.

In addition, the used car industry is set to experience a clamp down with the government’s decision to ban the importation of wrecked vehicles and cars more than ten years old, Mr Christie said.

The decision was made for various environmental and safety reasons.

Mr Christie told parliamentarians that taxicab owners would also now be able to import duty free used vehicles up to three-years-old as opposed to the current existing restriction of new cars only.

He further announced the outright elimination of duty on several items, including medical equipment and supplies, bicycles, burglar alarms and audio/visual equipment used by churches. He also announced the duty rate on canned and frozen vegetables has been reduced, but did not specify by how much.

The tax incentives, Mr Christie said, are aimed at spurring economic growth, the creation of jobs, building repairs and improving the living conditions of Bahamians.

Mr Christie announced several real property tax breaks.

“We fully expect that, through better compliance and more equitable treatment of property owners, we will be able to offer Bahamians tax relief through lower tax rates, while still improving revenue yields.

“To do so, the strengthened compliance tools and the modernised administration platform are critical. The proposed amendments to the Real Property Tax Act will begin to give some relief to homeowners and businesses as well as strengthen compliance and enforcement.

“The following are some of the relief measures that we propose in this budget: a reduction in the top tax rates on owner-occupied residential properties with attached rental units, more pronounced property tax relief for pensioners in mid-value properties, the introduction of a 10 per cent discount for residential property for owners who pay their taxes early each year, and a harmonisation in commercial property tax rates at a lower level of 0.75 per cent.”

The stamp duty on all real estate transactions is also being reduced to a lower, single tax rate of 2.5 per cent, Mr Christie said.

He also said that the government further proposes to put a two-year exemption on customs duty in place for building materials used to repair small homes and buildings in certain depressed parts of New Providence.

Mr Christie said his administration would also extend the exemptions under the Family Island Development Encouragement Act by an additional year and include Abaco, the east and west sections of Grand Bahama, Eleuthera and Bimini under the exemptions.

A reduction in the maximum rate for business licence fees from 1.75 per cent of turnover to 1.5 per cent, as well as reductions in rates for agriculture and fisheries operated businesses and for independent fuel distributors in the Family Islands, is also expected to come on stream.

Comments

proudloudandfnm 8 years, 10 months ago

VAT was supposed to facilitate reductions in all duties. Why you starting with cars when we paying almost $5.00 for a loaf of bread? $7.00 for milk?

And please keep in mind. Only Nassau has a car problem. Please keep that in mind when you come up with automobile regulations..... Thanks.....

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ohdrap4 8 years, 10 months ago

bread and milk already duty free. they need to reduce clothes more.

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OMG 8 years, 10 months ago

You are joking aren't you---Milk duty free ?????????? Cheaper to put cheap gin or rum on your cornflakes.

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ohdrap4 8 years, 10 months ago

dude, (or is it doodah?)

Do you have the internet? Download the document on duty rates and see for yourself.

and milk is price controled too.

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FNM_Retards 8 years, 10 months ago

Keep in mind PAPA raised the duty on SUVs instead of taxing the Webshops because he was a big sissy coward when the Christian Council told him NO he cant legalize the webshops. Just saying, the FNM you are so proud of came up with automobile regulations long time ago, PAPA wanted us to drive a bunch of small tiny vehicles, and we all had to do what he wanted.

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killemwitdakno 8 years, 10 months ago

Or because they are gas guzzlers and peopele we're buying them only because they we're cheap since Americans were getting rid of them for that reason during the recession.

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killemwitdakno 8 years, 10 months ago

Or because they are gas guzzlers and peopele were buying them only because they we're cheap since Americans were getting rid of them for that reason during the recession.

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OMG 8 years, 10 months ago

Try 11 or $12 a gallon on Eleuthera. Would love $7 a gallon.

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ohdrap4 8 years, 10 months ago

i just bought milk today from solomon's in nassau, it was 5.98.

in eleuthera, they have to pay extra for refrigerated freight.

If memory serves me well, it was the plp that destroyed the dairy farms of eleuthera.

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OMG 8 years, 10 months ago

Come on $3-4 for freight per gallon. No way.

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ohdrap4 8 years, 10 months ago

try asking the food store manager, yes it is a ridiculous price.

the refrigerated freight for 1 gallon of milk from marsh harbour to treasure cay is 1.25, just 25 miles from each other.

the price control people do visit many stores in the family islands and demand the papers of price controlled items, and i have witnessed that they check.

the margin is controled but the grocer adds the margin to the landed cost.

before january 1st, the milk i now buy for $5.98 used to be $ 7.39, a reduction, even when vat added to $5.98.

the lower grade milk now sells for $4.99 (reconstituted powdered milk)

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OMG 8 years, 1 month ago

Give me a break almost $5.00 a gallon for shipping-are you serious. In Eleuthera food prices don't go up by cents they often double overnight.

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asiseeit 8 years, 10 months ago

Finally something that makes sense. Wrecked cars should have been banned from the get go.

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Girly 8 years, 10 months ago

For real. I don't know why anyone would want a car over 10 years old anyway. Most times the car would not last a year without problems. We have to get into the new world. Whenever we go stateside all we see is nice cars. Why should the Bahamas get the scraps. Come on Bahamas.

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themessenger 8 years, 10 months ago

No duty on burglar alarms?? Is this a tacit admission from we prime Minister that we might have a crime problem? I guess the next step will be no duty on ankle bracelets.

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FNM_Retards 8 years, 10 months ago

Hi foreign bowtard, someone in government has probably invested in an Alarm Company, hence duty dropped on Alarms. This is the same crap that happens from FNM to PLP. Both been promising to lower duty on that for years, amazing it took them this long. 2007 FNM manifesto promised to lower duty on various security equipment to "help" in the fight against crime, they did not lower duty until it benefited their private businesses at the END of their 5 year term, when one of their politicians family business won a bid that involved such security equipment - the duty was later raised again. FNM and PLP all full of sht. They drop duty on whatever benefits them or their voters, all of them for sale.

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ohdrap4 8 years, 10 months ago

never thought i would see the day when i would agree with the retard.

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killemwitdakno 8 years, 10 months ago

Well there are thriving Bahamian security companies that install alarms. Duty free should have been for their importing of the alarms. Now the managers of those systems will be out of business and security will be ineffective.

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MasterShake 8 years, 10 months ago

Ever thought that a move like this may affect people who may be car collectors and the like? P. S. Most of the car on that drive around smoking up a storm these days are under 10 years old.

This was meant in reply to a post above.

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killemwitdakno 8 years, 10 months ago

Thought the exact same thing. Isn't the car show a big deal in Nassau?

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realfreethinker 8 years, 10 months ago

What does the year of a car have to do with it's performance. I have seen 12 year old cars running super and five year old vehicle smoking to high heaven. This is another bullhsit decision. Until you put in place real emission inspections this policy is a waste of time.

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ThisIsOurs 8 years, 10 months ago

I have a 15 year old car with low mileage in great condition that has outlasted 1 used and 2 new car purchases that a friend has made over the same period.

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FNM_Retards 8 years, 10 months ago

you sure its in great condition? plenty people driving around with crap coming out the back of their vehicles and they don't even know it.

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killemwitdakno 8 years, 10 months ago

If this was about the crap coming out the back then he needs to make an effort for CNG vehicles.

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OMG 8 years, 10 months ago

Yes we buy cars and burglar alarms every week on the other hand food is just an impulse purchase. Why audio / visual equip for churches ? How the hell does that reduce our living costs.

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asiseeit 8 years, 10 months ago

The DJ equipment for churches is because nobody can afford to go out and party anymore, we just go to church and pray we can afford rent and food. Also these crooked ass preachers are just like our politicians so they got to scratch each others back. They are both sweethearting/boungying and parasites that live off of other peoples money.

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FNM_Retards 8 years, 10 months ago

Find out what new alarm company just popped up, or what politician suddenly has a share in some existing alarm company. There is your answer.

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killemwitdakno 8 years, 10 months ago

They always get shares and we can't invest.

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killemwitdakno 8 years, 10 months ago

You realize all other islands that were forced to implement VAT was in order to have them REPLACE duty. We're being double taxes on everything. Duty needs to be drastically reduced. Business imports ought to be duty free to ensure they stay alive.

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bahamianfool 8 years, 10 months ago

what constiyutes a wrecked vehicle alot of small people will lose out

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bahamianfool 8 years, 10 months ago

n duty has being 65% for some time now

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FNM_Retards 8 years, 10 months ago

I didnt realize it was so expensive to buy N.

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killemwitdakno 8 years, 10 months ago

Yes duty on cars doubles the cost, that's why they buy them 10 yrs old.

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OMG 8 years, 10 months ago

Mr Christie, wake up and smell the roses, many persons on Eleuthera cannot afford the basic foodstuffs let alone a burglar alarm. Visitors as well are complaining about the extremely high cost of living. As for reduced duty on frozen veg and fruit----no use whatsoever as the merchants on Eleuthera will charge just the same and pocket the profit. Lets face it ,there is no such thing as seven and a half cents in practicality and all the merchants round everything UP.

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FNM_Retards 8 years, 10 months ago

If they are like most Bahamians they probably afforded an expensive smart phone, and so they could actually afford an alarm which is much cheaper - just saying. You probably dont need either of them on that island though.

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Sickened 8 years, 10 months ago

I approached the PLP to make 1/2 cent coins. Of course they agreed... but they wanted 100 million 1/2 cents a month as a kick-back.

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killemwitdakno 8 years, 10 months ago

Freeport and family islands are non existent

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Economist 8 years, 10 months ago

For once I agree with a PM Christie decision. The idea to ban vehicles over 10 years is a good one.

When we import old cars they have a shorter usability and are rendered useless in 5 or 10 years then we have the environmental problem of the cars rotting in back yards and more in the dump. All this costs the Min of health more money.

It is expensive to dispose of a car. Tat is why the Japanese are happy to sell them cheap as they would have to pay for their disposal.

In addition, the duty collected on older cars is less so old car= lower revenue+ higher disposal costs.

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B_I_D___ 8 years, 10 months ago

Let's spin that...how about antique car collectors?

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ohdrap4 8 years, 10 months ago

they can apply for a permit from the ministry of finance.

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newcitizen 8 years, 10 months ago

It is not expensive to dispose of cars. In fact they are worth a lot of money. A totally junk car that is still intact will get about $200-$300 from a scrap yard in Canada or the US. The scrap yard then breaks it down into the different metals and sell them to refineries for a profit.

No one on any of our islands seems to be doing that. They just let them rust away instead. Someone should be making money on this.

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killemwitdakno 8 years, 10 months ago

What is there no SCRAP YARD in Nassau? Cash for Clunkers would surpass Cash for Gold. Create a parts inventory and export. VAT return for donations.

I really wish you would change your "Economist" name..

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Economist 8 years, 10 months ago

Antique cars should be treated differently and the duty should be a lower percentage. Owners antiques don't leave them in the back yard to rust and leak transmission fluid into the water table.

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carguy 8 years, 10 months ago

so what about members of the BHRA and car enthusiasts who race cars that were manufactured in the late 90's.why should the sport die in this country over something like this

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John 8 years, 10 months ago

While the intent of the new laws are understood, this is going to be a tough cookie to crack. Firstly, the 10 year limit on car imports: This is intended to prevent persons from importing ole junk cars, (where the freight and shipping is more than the value of the car) and having to dump them a few months later. This adds to the clutter of junk in the islands (new Providence and Grand Bahama especially, and also depletes national revenue because the importer does not get value for money. In fact he contributes to government expenses when the derelict car has to be collected and dumped. However most cars being imported today do not fit in this catergory as the expected life of a vehicle is 15-25 years and trucks up to 30 years. The reason why there is a drastic price drop in vehicles in the 12-15 year age group is that Japan also does not want these vehicles on their roads and so they export (or dump) them to places like the Bahamas, South America and the rest of the Caribbean. Not only do they avoid the expense of having to dump these cars but they increase their exports and get into markets that the US cannot access. So from a national economic view the government should make a cut off point. It is better to spend a few hundred dollars more initially for a vehicle and get value than to bring it all the way here and have it sit as a lawn ornament a few months later. In the US a wreck is defined as any vehicle that has to be towed away from the scene of an accident. Regardless of how minor the damage, if the vehicle can not be driven away, then it is considered a wreck. And since these cars cannot be resold in the US they sell very cheap and besides the safety issue, that is a problem when they arrive in The Bahamas. In many instances Bahamas Customs do not accept the value declared on the vehicle. Then the importer repairs the vehicle and resells it for near pre-collision value. Since there is no title check, the buyer is not aware he is purchasing a wreck vehicle and, in some instances, when he has an accident, it is fatal or the injuries sustained are more serious than if the car had not been repaired. They are probably the reasons for bans on wrecks. But what about persons who import these 'wrecks' to canabalise parts to repair their on vehicles? Especially for parts that can no longer be found on the retail market and the only other means is from a wrecked vehicle? Does 'the dog' eat their lunch?

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newcitizen 8 years, 10 months ago

John, you are so far off one most of what you said.

Dead, junk cars do in fact have a value. Go to any scrap yard in the US and they will pay you good money for your non working car. They do this because there are lots of recyclable items in cars that add up to quite a bit of money.

Cars do not have a 15-25 year lifespan. They generally last for about 200,00 miles, but that is in a nice warm climate with mild winters and no salt air. Cars here corrode way before 25 years. As well as the fact that maintenance costs rise as a car gets older.

There is no such definition as a 'wreck' in the US. If a car is in a accident, the insurance company decides whether it will cost more money to fix or to buy out the car from the person. They then chose the option that will cost the least. It doesn't matter how bad an accident is, if the car is repaired and meets the current safety standards, then it can get a licence and be driven.

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Economist 8 years, 10 months ago

With respect to the cost of a car to be scraped. Yes in Canada they get $200 or 300 but they require you to drain al the fluids out first. They also require you to dispose of the battery. you also have to deliver it to the scrapyard. So add that to the cost and BY THE WAY pay to have it shipped to the scrapyard where they give you your 200 to 300 dollars.

The cost to dispose of a car in The Bahamas is over $800.00 per car.

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killemwitdakno 8 years, 10 months ago

For the duty and VAT on a 10 year old car, the disposal cost should then be free. 65% of $5,000 is $3,250. Duty free cars, more money to spend locally or to buy newer cars where more VAT can be collected, and a profitable scrap yard, or cost to the environment instead ( like PLP really give a shit, they probably just don't like to see poor people) , choose one or the other.

..economist..

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killemwitdakno 8 years, 10 months ago

Wow...this is testimony to our PM's thinking. There's the issue of derelict vehicles and his first idea is to ban inexpensive cars as if newer ones are affordable for the general public...Can you say out of touch?

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InderiaD 8 years, 10 months ago

When does this take effect? The importation of the cars I'm referring to.

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Economist 8 years, 10 months ago

By the way, the effective rate of importing a car with a 65% duty + 7.5% VAT is really 77.35% as you pay the price of the car + 65% then pay Vat. if you paid the car +(duty & Vat) you get 72.5%.

Government is getting13.35% Vat on the car.

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Abaconian 8 years, 10 months ago

Environmental reasons? What a load of BS. If the environment is his concern than he wouldn't simply put a blanket ban on all cars over 10 years old - Instead he would lower the import duty on cars that have better fuel efficiency - or vice versa - raise the import duty on gas guzzlers. Besides, many cars over 10 years old burn less fuel than some of the newer cars! I don't know who he's trying to fool with that nonsense but it ain't working. I would like to see perry christie stop treating the public like fools. Everyone would have far more respect for him if he told the truth. The truth behind the the ban is that cars over 10 years old are obviously cheaper than new cars, and the government can't afford to lower the duty rate to 65% if everyone is going to buy cheaper older cars. Psssh say environment. Give me a break.

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carguy 8 years, 10 months ago

this ban will have a really bad effect on the BHRA racing community and those who might have wanted to consider joining the sport. death to the race world i guess. worst PM in our country's history!! the worst decision makingof all kinds in every area in this country smh

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