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The long-standing practice of waiving taxes and duty on the importation of both new and used vehicles has now come to an end.
On Wednesday, the Cabinet officially announced a new policy that effectively terminates the practice that has been in place for many years.
The Cabinet affirmed its decision to abolish discretionary waivers on Duty, ABST, Revenue Recovery Charge (RRC), and Environmental Levy on the importation of used vehicles and the sale of new vehicles, according to reliable government sources.
Customs and Excise Department’s report on Revenue Collection in 2023 influenced the Cabinet’s decision.
The report revealed that the discretionary waivers granted on importation taxes exceeded the government’s deficit amount, which was being financed by borrowing.
Therefore, in order to fill the gap between revenues and expenditures and reduce the government’s borrowing, the Cabinet emphasized the necessity of discontinuing the waivers.
Every year, numerous used motor vehicles are imported from countries such as Japan with the expectation that the owners will not pay the full duty, ABST, RRC, and other taxes that are payable on these imports.
The government’s decision reflects a concerted effort to bring expenditures in line with revenues, thereby reducing the government’s need to borrow to fulfill its financial obligations.