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Stimulus package: No deal, says automobile dealers

Published:Sunday | January 3, 2010 | 12:00 AM

Brian Bonitto, Jamaica Editor - Overseas publications

IN AN effort to jump-start an ailing auto sector, the Government announced on September 9, a six-month reduction in the Special Consumption Tax (SCT) on new imported motor vehicles by 20 percentage points.

The move - dubbed 'motor vehicle stimulus package' - saw the slashing of the tax on vehicles 1600cc upwards.

Under the programme, vehicles which attracted SCT of 10 per cent were zero rated. The SCT on high-end vehicles was also reduced from 70 to 35 per cent. The package ends in March of 2010.

However, less than a month after its introduction, chairman of the Auto Dealers Association (ADA), Kent LaCroix, said his organisation - which represents new car dealers - wanted more.

LaCroix, who has been elected chairman for five consecutive years, said while the dealers were appreciative of the government's offer, it was not enough.

'Cash for Clunkers'

"The new duty regime applies only to vehicles that landed before September 11 and were already in the island in bonded warehouses," said the chairman at a press conference held at the Liguanea Club in St Andrew.

"A 63 per cent across-the-board reduction in the duty would be ideal," he added.

Similar approaches had been adopted by governments overseas to revitalise a sector hard hit by the global recession. The US, Germany and France introduced the 'Cash for Clunkers' programme. Consumers were encouraged to trade in their old gas-guzzling 'clunkers' for cash rebates towards the purchase of more fuel-efficient and environmentally friendly vehicles.