DAYS AFTER the Government announced a reduction in special consumption tax (SCT) on imported motor vehicles, the opposition People's National Party has said the move was ill advised.

Opposition Spokesman on Finance Dr Omar Davies has described the Government "stimulus package" for the motor vehicle industry as a "muddled" policy formulation.

The administration made the decision against the background of declining motor-vehicle sales.

But the Opposition is of the view that the Government has misunderstood the objective of the stimulus package, arguing that it was supposed to encourage consumption of domestic production and not imports.

According to the Opposition, the SCT cut on imported vehicles comes at a time when the Government is engaging the International Monetary Fund for loan financing to address balance-of-payments concerns.

The spokesman pointed out that a spike in motor-vehicle imports would translate into additional demand for oil, which was the largest draw on the country's balance of payments.

"Therefore, if the Government's policy objective is met, this will simultaneously have the negative effects of translating into additional pressures on the Jamaican dollar, a reduction in the country's net international reserves, and a worsening of our balance-of-payments problem," the Opposition spokesman said in a release.