![Motor vehicles at Choc round-about.]()
Motor vehicles at Choc round-about.
A special press conference was held at the Ministry of Infrastructure today, Friday, August 28, 2015 to formally introduce the Annual Vehicle License Reform.
Below is the official statement made by Permanent Secretary:
During the 2015/2016 budget address, the Hon. Prime Minister alluded to various revenue reforms geared towards increasing revenue and improving the overall efficiency of several government departments, while engendering a greater degree of fairness in the tax system. Among these measures was a proposal to reform the annual vehicle license system.
The last revision to the vehicle license regime was conducted in 2009, some six years ago. This system reintroduced annual vehicle licenses, and two broad categories were stipulated.
The current system causes cars, jeeps and minibuses to pay a fee of $150.00, while all goods vehicles and earth-moving equipment pay $300.00.
This system cannot be considered fair as it does not cause the owner of larger vehicles in particular to make a fair contribution towards the maintenance of our roads predicated on the fact that their contribution to road deterioration is indeed greater.
Consistent with a desire to create more fairness and equity in the taxation system, and to ensure that all road users pay their fair share to contribute to the maintenance of our roads, the Government has conducted extensive research on this issue and has developed a new mechanism to achieve this objective.
The new system is progressively tiered and based on motor vehicle weight and degree of road deterioration. The new mechanism which will be implemented from September 1st 2015 is consistent with what obtains in other islands in the region, and also in some more developed countries.
The following is an explanation of how the new system has been designed:
Firstly, the weight of private cars and goods vehicles will be the basis for arriving at the new annual license fees for these vehicles. Three (3) weight classes are proposed for private cars. The cut off points for each is based on average weights observed for intuitively small, medium and large cars. Some of the examples of private cars in the 3 categories are as follows:
- Class A: Nissan Cube, Kia Picanto, Hyundai Gets, Chevrolet Spark just to name a few and the fee for class A is $250.00. Class A applies to all private cars weighing less than 1,134 kg.
- Class B: Hyundai Sonata, Honda Accord just to mention a few, and the fee for Class B is $300.00. Class B applies to all private cars with weight ranging from 1,134 kg to 1,587 kg.
- Class C: Toyota Prado, Mitsubishi Pajero etc and the fee for class C is $350.00. Class C allies to all private cars with weight of 1,588 kg and over.
75% of the vehicle stock on island is estimated to be private cars with 39% being Class A, 41% in class B and 19% in class c.
Four (4) classes exist for goods vehicles, and the following criteria and fees are applicable:
- Less than 1,000 kg : $450.00
- Less than 1,001 kg to 3,000 kg: $550.00
- Less than 3,001 kg to 5,000 kg: $600.00
- 5,001 kg and over: $700.
The category for Hired Vehicles is as follows;
- Class A: less than 1,134 kg: $250.00
- Class B: 1,134 kg to 1,587 kg: $300.00
- Class C: 1,588 kg and over: $350.00
Passenger vehicles which carry an M plate will over the next two years be required to pay Annual Vehicle license of $150.00 as has existed in previous years.
Farming vehicles remain unchanged and will pay an annual license fee of $150.00
All motorcycles will be required to pay annual license of $150.00.
A Mobile crane will pay an annual License fee of $500.00.
A motorcycle used as a Hearse will pay an annual license of $150.00, while all other hearses will be required to pay $300.00.
The Annual License fee for Earth moving Equipment is $750.00
The Annual License fee of tractor with pneumatic tyres is $750.00
The annual license fee for roller is $750.00.
The Annual license fee for Unit Heads for container trucks is $750.00.
The Annual License fee for a concrete mixing truck is $750.00.
![Mrs. Allison Jean Permanent Secretary.]()
Mrs. Allison Jean
Permanent Secretary.
In an attempt to ensure that this system is administered fairly and smoothly, a list of some 600 vehicle dis-aggregated by manufacturer has been collated by the Ministry of Finance with kerb weights covering the period 1995 to 2015.
This master list will be updated on a periodic basis. Discussions have been held with the Customs and Excise Department to amend their administrative procedures to ensure that weight of vehicles imported is captured and appropriately stored. It is anticipated that the Customs and Excise Department will on a monthly basis to send to the Ministry of Infrastructure, Port Services and Transport a list of vehicles imported for that period and their weight.
The government recognizes that a proper road network is essential for national development. Collecting revenues for that purpose through vehicle fees is an appropriate mechanism. Over the past few years the cost of maintaining the road system has escalated.
While this new revenue mechanism is expected to raise an additional $3.5 Million annually, this only represents a fraction of what is required since road maintenance and rehabilitation is one of the largest areas of government’s capital expenditure. Presently, the cost of one mile of road is approximately $1.5 Million.
It should be noted that over the past three years, 17 bridges have been constructed. Road works in the Islands’ south, inclusive of new road construction in Vieux Fort, Laborie and Choiseul, which were conducted between 2014 and 2015 cost approximately $60 Million.
The Government is preparing in 2016 to undertake rehabilitation work on approximately 38 km of farming roads from funding provided by KAFED, which is likely to cost $51 Million. In the 2015/2016 Budget, another $45 Million will be spent on rehabilitating community and Primary roads using the Finance Build Approach.
The government has also signaled its intention to continue the 4 lane highway into Gros Islet from the Choc Roundabout. That project will also cause 20 km of secondary roads around Gros Islet to be repaired, and the project is likely to cost approximately $150 Million.
Finally, this new measure represents part of a larger plan by government to help reduce the fiscal deficit while continuing to provide essential services to the entire population. The road infrastructure across this country is aging and each day, the government has to respond to the demands of its citizens for world class infrastructure.
The additional revenue from this measure will assist in bolstering governments’ public sector investment in road maintenance. We therefore look forward to the support of the motoring public as we collectively rebuild the country’s infrastructure.
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