Vehicle Tariffs  -- a Short Primer

You may think the tariffs on vehicles are exorbitant.  At first glance, they may seem so.  However, you should realize a few realities. 

1. Little Third World countries don't need a heavy influx of US-style heavy vehicles.   Gas is expensive, the roads are primitive, and the infrastructure (busses, taxies, trucks) is fairly well established to support trade without a lot of new vehicles. They use tariffs to reflect their feelings on these large  vehicles.  

2. Most of these countries realize a significant amount of their revenues from the import of "luxury" vehicles -- vehicles which are obviously luxurious compared to the local population of vehicles.  Read that word "luxurious" carefully, and translate it mentally into "luxury tax."  i.e.  if you want it bad enuf, you can pay for it.  

3. Most countries (including some in the EU) look at big gas hogs as a bane rather than a blessing.  Belize, among others, has far too many 18 to 24-wheel trucks driving on the highways.  We don't need a lot of oversized American vehicles cluttering up the roads, parking spaces, and general landscape.  This translates to a statement:  "If you really want it -- we'll make you pay for it."

Not just Belize feels this way.  For example:

1. In Denmark, an average vehicle pays a 120% tariff.  A "luxury" vehicle pays 180%.  For example, a $16,000 vehicle would retail at $66,452. Denmark doesn't need more motor vehicles.  Bicycles, maybe.  

2. In Egypt, cars with an engine >= 1 liter displacement pay a 60 percent duty; cars with an engine between 1-1.3 liters displacement pay a 85 percent duty; cars with an engine between 1.3-1.6 liters displacement pay a 100 percent duty; cars with an engine between 1.6 and 2.0 liters displacement pay a 135 percent duty and cars with an engine over >= 2.0 liters pay a 160 percent duty. In addition, a sales tax is also levied on motor vehicles by engine size. Motor vehicles with engines up to 1.6 liters pay a 10 percent duty, 1.6 - 2.0 liters pay 20 percent, and engines at 2.0 liters and more pay 30 percent.

3. South Africa: For completely built up (CBU) vehicles, there is a 110 percent customs duty. South Africa also assesses a 5-15 percent surcharge, a 10 percent VAT rate, and a 40 percent excise tax. As of 1994, a 40 percent excise tax is levied on the wholesale selling price of vehicles, of which 37.5 percent can be rebated by vehicle manufacturers (2.5 percent is non-refundable), once 75 percent local content is achieved. <hee, hee>

4. Israeli.  "There are no duties on U.S. automobiles. A uniform purchase tax rate of 100 percent is levied."

So.  The grist for this little primer is contained in the NTDB report on tariffs in 75 countries.  You might like to look at it here.  

If you still think a new car is the most important part of your self-image, maybe you should think about another place to retire!

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