Budget 2023: VAT on new electric vehicles removed; duty on imported cars slashed

The content originally appeared on: INews Guyana

In a move to incentivise the transition to lower-emission vehicles in Guyana, the PPP/C Government has removed the Value Added Tax (VAT) on new electric vehicles.

During his presentation of Budget 2023, Finance Minister Dr Ashni Singh explained that this measure applies to new (less than four years old) electric motor vehicles – not hybrid – of any power rating.

Further, to support the investment decision of businesses to switch to more environmentally friendly vehicles, the Finance Minister also announced an increase in the writing down allowance applicable to all-electric motor vehicles to 50 per cent annually.

These measures are in keeping with the Guyana Government’s commitment towards development along a low-carbon development pathway.

According to Dr Singh, the ownership of a motor vehicle is no longer considered a luxury since it improves the ease of access to and from the places of home, work, and learning.

Consequently, he announced additional measures to reduce the cost of motor vehicle ownership.

These include the reduction of the duty on the importation of new (less than four years old) motor vehicles below 1500 cc from 45 per cent to now 35 per cent. This will reduce the cost of importing such a vehicle by approximately $200,000.

In addition, the current tax rate on used vehicles below 1500 cc (4 years and older) will now be replaced with a flat rate of taxes of $800,000.

This will reduce the cost of importing such a vehicle by $300,000 on average.