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Used-car importers operating within the law

Some used car dealers in Barbados are distancing themselves from any “irregularities” with the importation of vehicles, insisting that they are breaking no laws.

They were responding to statements by Minister of Small Business, Entrepreneurship and Commerce Dwight Sutherland last Friday that Government would be putting a new vehicular policy and legislation in place to  govern the importation and assembling of vehicles, correct a number of “irregularities” and “create a level playing field” among new and used car dealers.

This position was taken after several concerns were raised by new-car dealers who argued that used-car dealers were importing disassembled vehicles so they could pay a far cheaper rate of taxes. They claim too that some dealers were declaring vehicles in a lower tax bracket than they should have been, so they were then able to sell them up to $25,000 cheaper than a new-car dealer.

Sutherland, whose comments came after a tour of NASSCO Ltd, also pointed out that the garages that were then reassembling vehicles on island were not authorized to do so.

However, most used-car dealers told Barbados TODAY it was not their fault if they were able to import a vehicle disassembled since the law provided for it.

“I don’t think it is a matter of being fair. If you have a situation where your tariff is structured, then you follow it . . . So if for example, the duty on a car is 200 per cent, but the duty on two components that make up the car is 50 per cent each, so when it comes separately it is 100 per cent cumulatively as opposed to the 200 per cent, anybody who is clever enough is going to bring it that way and assemble it and save 100 per cent.

“I don’t see that as breaking the law. To me it is commonsense and being clever, and if you have the capacity to do it, I can’t fault anybody who does that,” one car dealer explained.

He said he believed Government would seek to change that through legislation, but he suggested that this could result in job losses.

“You please one and put other guys out of business,” said the dealer who requested not to be identified.

“If these garages are into assembling they are going to have to obviously be employing electricians, technicians and assembly guys. So you are saying because you want to stop that you are going to put 100 people on the breadline to facilitate a company that is going to bring it fully assembled and the price is three times as much?” he queried.

Taxes on imported vehicles are paid based on the declajred value, age of the unit and the tariff heading based on various criteria.

Managing Director of Express Import Inc. Ahmed Esuf told Barbados TODAY he agreed there was need for “a level playing field” when it comes to importing vehicles assembled or disassembled.

“They need to get that sorted out because obviously that is not a level playing field,” he said, adding that most disassembled vehicles were damaged vehicles.

However, as it related to other concerns including used car dealers paying lower taxes, Esuf said “You simply can’t compare a used-car dealer with a new-car dealer.

“For a new-car dealer obviously the cars are brand new, they have a warranty. When we bring in a car and something happens to it we have to fix it from our end, we have to repair it. So it can never be a level playing field when it comes to that. I don’t understand where he is coming from. NASSCO  obviously now has a warranty from Toyota. So it could never be a level playing field,” he stressed.

Like other used-car dealers, Esuf said he hoped the issues were carefully thrashed out before decisions were taken, adding that it was now a matter of wait and see.

“I honestly don’t know what they are going to do, but by yearend they will have it sorted out, so let us see. I don’t know how they are going to come with the used cars, but I agree on the disassembling. They should have policies in place because anybody can import a disassembled car right now which is not fair,” he said.

However, another St Michael car dealer who also requested anonymity, told Barbados TODAY he did not see the need for preventing them from importing vehicles disassembled.

“In Barbados you can’t expect one person to have the pie instead of expanding it to other business. You always have one person want to do things,” he said.

While disassociating himself from any cheating of the system, one used-car dealer said he believed the new-car dealers were crying out because of the significant dent in business in recent times.

Officials have argued that the “anomalies” were partly responsible for the fall-off in sales of new vehicles since 2017 by some 16 per cent, going from roughly 3,100 per year to just over 2,600.

“I see it being a bit untoward that a minister can almost side with an entity based on the fact of a decline in sales. What about when other entities face similar declines, do the ministers rush to their aid because of a 15 per cent decline? I don’t see it. And then the reason for that is because there are other persons in the market. I just don’t see it as being fair to make that call based on a 15 per cent decline in a company’s sales,” said the car dealer, who added that it boils down to who is providing a better service for the customers.

“I guess if the service is good you will stay afloat. If the service is bad you will fall away. Needless to say, I don’t feel that you should jump to get aid simply because you are bigger than anybody else,” he added.
marlonmadden@barbadostoday.bb