Sunday, June 22, 2014

Taxing the taxed

(First editorial for the daily paper Kuensel) 

Vehicles are prized possessions, be they luxury or necessity.  The news of  lifting of the ban on import of vehicles would have sparked excitement, if it were not for the revision of vehicle import taxes, deliberated in the National Assembly, snubbing it out.
Instead, the feeling it has generated is one of exasperation and disappointment, despite the government’s reasoning.
The reasons are, to some extent, why there is a disgruntled lot.
But most importantly, the burden of tax increase, including the five percent on fossil fuel, would weigh down mainly on the low-income group.  The revision is expected to set off a chain reaction, with the uncontrollable inflation receiving yet another boost.
For the low-income people, the preferred vehicle comes in small packages and lower cylinder capacity (CC).  The government proposed a 110 percent tax on the import of vehicle in the 1,500CC category, and the National Assembly reduced it to 100 percent, citing reasons, such as unaffordability and necessity.
Those imported from India will not be levied customs duty, which is 45 percent, only sales and green taxes.  In retrospection, the government imposed the ban to control the outflow of Indian rupee.  The situation could be put to task, with those wanting to buy vehicles choosing the cheaper option.
The government will garner a handsome sum from the taxes, but the question is: at whose expense?
There are those who’ve been waiting for the ban to be lifted to buy their first cars, which can also be the first family car.
At the assembly discussions, members argued that it would be appropriate to let first-time buyers purchase without the revised rates.  The second, it was said, could be taxed the new rates, because it would then fit as a luxury.
This makes sense in the light that public transport system is either lacking or unreliable.
The five percent fuel tax rubs salt on the wound.  Cost of transportation will increase, and this will lead to increase in cost of goods and services, and here again the low-income group and farmers in rural areas will be hit the hardest.
The intention to raise vehicle import taxes is misplaced, despite motives, such as environment factor, control of vehicle numbers and reducing sreliance on fossil fuel, being laudable.
What’s important, at least for the time being, is to first have alternatives in place before taking the plunge.  Electric cars are to decrease reliance on fuel, but it is yet to establish itself.  Besides criticism faced at home, the vehicle in question, Nissan Leaf, has been receiving negative reviews in the international market and in Japan.
The capital city has a fairly good public transport system, but it needs a major boost to serve and cater to the masses.  In other districts, public transport is almost lacking.  An alternative should be in place, like an efficient and reliable transport system, so buying a vehicle can warrant a second thought.
With rising cost of living, aren’t citizens, especially from the low-income group, already taxed enough?

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