The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top auto dealer yesterday backed the International Monetary Fund’s (IMF) call to increase tax rates related to the sector, suggesting this could generate up to $40 million in extra government revenues per annum.

Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, agreed with the Fund’s suggestion to increase motor vehicle licence fees by at least 20 per cent, telling this newspaper there “is room there” for tax increases.

Warning that Value-Added Tax’s (VAT) regressive features might “kill the goose that lays the golden eggs”, Mr Albury said the auto industry was one sector where the Government could extract more revenue from the existing system.

“I honestly feel that between the Driver’s Licence fee increasing; vehicle registration fees being restructured; gasoline and diesel tax being restructured; and some limits on used vehicle imports, it may generate around $35-$40 million,” the BMDA chief told Tribune Business.

“I fell that there’s more room for the Government to achieve more revenue out of the auto industry, be it fuel, the registration of vehicles, the use of vehicles on the road.”

The IMF recommended to the Government in June (see story on Page 3B) that it increase the tax rates on ordinary gasoline and diesel fuel, describing these commodities as “under-taxed”.

This was a sentiment also backed by Mr Albury yesterday, who agreed with the Fund that increased - and higher - motor vehicle rates for SUVs and high-end vehicles was a “fairer” and more progressive form of taxation.

Mr Albury, who operates the Auto Mall, Executive Motors and Omega Motors dealerships, again called for a 150 per cent increase in the annual Driver’s Licence fee from $20 to $50 per year.

Arguing that the latter figure was still “reasonable”, with an estimated 150,000 licensed drivers on Bahamian roads, this could generate an extra $4.5 million per annum.

“One way or another, we’ve got to pay something,” Mr Albury told Tribune Business. “What are the areas that are least impactful?

“Rather than VAT, which will be a regressive tax, let us pay without killing the goose that laid the golden egg.”

Mr Albury said he “totally agreed” with increasing fuel tax rates, as this was offset - and would help to pay for - New Providence’s hew highways and road network.

The increased taxation, he added, would be compensated for by the reduced travel times, greater efficiency and productivity, and less wear and tear on vehicles from the new road network.

The BMDA chief, though, reiterated his call for the Government to impose age limits on used vehicle imports, given that consumers would naturally gravitate to this market if taxation rates increased.

“Otherwise we will have all these environmental clunkers Singapore and Japan are trying to get rid of,” Mr Albury told Tribune Business.

“We’re becoming the dumping ground for those countries. I’m not saying don’t entertain used cars, but we want those that last for a certain period of time and let’s the Government recoup some revenues.”

Noting that Jamaica, Barbados and Trinidad had all put in place age restrictions on imported vehicles, Mr Albury said experience had shown this did not hurt the so-called ‘small man’.

He also called for individuals importing cars from abroad to pay a special permit and fee, arguing that this would prevent them selling two-three vehicles from the roadside while avoiding the taxes and fees established dealers have to pay.

“At the same time, the Government should look at putting in place proper public transportation to give an alternative to people who don’t want to use vehicles, the BMDA chief added, calling for a revival of the proposal for a unified New Providence jitney system.