Tracey-Ann White, a sales representative at Crichton Automotive Limited, checks one of the used cars in the dealership's parking lot in St Andrew.

Jamaicans should see a significant reduction in the prices of most new and used automobiles in the coming weeks as the Government slashes the Special Consumption Tax (SCT) on imported cars and pickups in what it has dubbed a "motor vehicle stimulus package".

"With the sale of motor vehicles down significantly since the start of the year, the Cabinet has approved the rollback in the SCT as part of efforts to stimulate sales," Information Minister Daryl Vaz announced yesterday.

Under the programme, vehicles at the lower price end, which attracted SCT of 10 per cent, will no longer attract the tax. High-end vehicles, which had been slapped with a 70 per cent SCT, will now pay 35 per cent.

Welcomed move

It is a move that has been welcomed by the motor vehicle industry, which is projecting much lower prices for buyers.

"For motor vehicles in the category of 1000cc to 1600cc there should be anything between a $60,000 and $110,000 reduction in the price, and the more you go up in the cc rating there should be a greater reduction in the price," Kenneth Shaw, president of the Jamaica Used Car Dealers Association, told The Gleaner.

"So a vehicle with a 2.5-litre engine should see a $300,000 to $400,000 reduction in the price."

Shaw, however, noted that not all motor vehicles would have their prices reduced.

"Motor cars with 1000cc rating and lower attracted no SCT so the reduction will not affect the prices of those vehicles.

"It will not affect trucks, which paid no SCT as well, and some buses. Persons who qualify for government concessions will also not see any reduction as they did not pay SCT," added Shaw.

He was supported by Marjorie Borough of Stewart's Auto Sales, and Kent LaCroix, president of the Automotive Dealers Association.

"We are absolutely delighted because this will be a stimulus for the full duty customers and the 20 per cent duty concessionaires will now be able to buy a vehicle of choice," Borough said.

"It is something that we have been working on for the last nine months and it is in keeping with the request we had put forward to Government," LaCroix added.

The motor vehicle dealers were responding minutes after Vaz told the weekly post-Cabinet media briefing that the reduced SCT would take effect today and remain in place until March 31, 2010, when it would be reviewed.

The new SCT applies to all vehicles which are being imported, included those already in the island but which have not been cleared.

arthur.hall@gleanerjm.com

Motor vehicle stimulus package