For a 2017, 2.0L hybrid vehicle, the import consumption tax was previously about 1800 lari (about 663 US dollars), but will increase to about 9000 lari (about 3315 US dollars) under the new regulations. The consumption tax on right-hand steering vehicles will still be levied at three times...

According to a public statement by Georgian Prime Minister Iraq Kobakhidze, Georgia will abandon its original practice of "banning the import of vehicles more than 6 years old" and instead significantly increase the customs clearance tax on such vehicles: it will no longer "ban all over the board", but will increase import costs by significantly increasing consumption tax (ак р из). The Georgian government linked the adjustment to environmental goals, saying it was intended to improve air quality, and stressed that "the interests of the private sector and citizens were considered" during the revision process.

According to Kobahize, the new regulations will uniformly set the consumption tax on vehicles over 6 years old at 4.5 lari (about US$1.66) per 1 cubic centimeter of displacement. This means that the key to whether old cars can enter is no longer "access", but "whether they can be counted as posted". The tax amount is directly linked to the engine displacement. The larger the displacement, the heavier the tax burden. The report gives a typical example: a 2017, 2.0L hybrid vehicle, the import consumption tax was previously about 1800 lari (about 663 US dollars), but will increase to about 9000 lari (about 3315 US dollars) under the new regulations. In addition, the consumption tax on right-hand steering cars will still be levied at three times.

Compared with previous policies, the "tax increase range" of the new regulations has caused market shocks. The report quoted comparisons as saying that in the past, the consumption tax on vehicles aged 6 to 9 years started from roughly 0.80 lari/cc, and gradually increased as the age of the vehicle increased, reaching a maximum of about 2.4 lari/cc; now it has jumped directly to 4.5 lari/cc, which is equivalent to a one-time increase of about 200%-500%.

This adjustment is also seen as a "pullback" by the Georgian government to its previous tough plan. Kobahize said on February 12 that Georgia plans to ban the import of vehicles more than 6 years old (except electric vehicles) starting from April 1. At that time, officials also cited environmental protection reasons and claimed that it would not affect re-exports, nor would it affect residents who already own old cars. However, the initiative quickly attracted criticism in business circles. In the end, the government changed the "comprehensive ban" to a "tariff threshold", formally reserving the possibility of imports and essentially raising the cost to a level sufficient to change the logic of the transaction.

Economist Roman Gotsiridze was blunt about this: it was equivalent to using huge tariffs to "bypass the ban" and "making it meaningless to import used cars."

[Brief Comment] This turn in Georgia deserves high attention. The Georgian market is sensitive to vehicle prices, and the new regulations will tax taxes based on displacement and increase the "one-step" increase in vehicles older than 6 years old, which will directly squeeze the profit margins of medium and low-priced old cars; even hybrid models are not Tax exemptions. In the coming period, vehicle source choices for Georgia are likely to be more concentrated in categories with relatively controllable tax burdens such as shorter vehicles, smaller displacements, and electric vehicles. At the same time, the three-fold tax rate for right-hand steering vehicles remains unchanged, which also means that the local book competitiveness of the relevant vehicle sources will be further weakened. The policy nominally emphasizes environmental protection, but for the trade side, it is more like a clear "cost reset": whether a deal can be made depends on the tax form first.

Source: Guangdong Good Car

[Disclaimer] The content of this website (including pictures and texts) originates from the Internet, and the copyright belongs to the original author. Respect the rights and interests of originality, and select content is only used for information sharing. If copyright disputes are involved, please contact us to handle the deletion in a timely manner.