Treble tax take on cars

Press, 24 September 1987, Page 40

Treble tax take on cars

New Zealand car importers make no less than three major contributions to the Government’s coffers every time a new car crosses a New Zealand wharf, according to John Wood, the general manager of Eurotrans Motors, Ltd. These are the licence premium, duty and excise tax and the Goods and Services tax. "Without the Government takes, a car that cost NZ$lO,OOO to buy and freight to New Zealand would sell for around $13,000,” said Mr Wood. “With current policies, that same car will sell for $27,500,” he continued, adding that wholesale and retail profit percentages were unaltered when preparing the comparison. The New Zealand motorist paying $25,500 for a new overseas assembled car can be handing the Government

$12,208. This comprises $3300 for the built-up vehicle licence premium, $6400 for duty and excise tax and $2508 GST. However not every new car purchased attracts such a large tax take. A locally assembled model or one imported from Australia or the United Kingdom in built-up form attracts a lesser amount. Mr Wood believes that removal of licence premiums should be the first step in giving the New Zealand motorist something approaching a fair go. “Although our research is incomplete, present indications are that only the motorists of Bolivia suffer from higher vehicle taxation. “Perhaps our immigration authorities should be alerted to incoming Bolivians looking for bargain cars,” concluded Mr Wood.