WORKSHOP ON GLOBAL FUEL ECONOMY INITIATIVE TOPIC: MOTOR VEHICLES RELATED TAXES BY Mahen Bheekhee Lead Analyst Ministry of Finance and Economic Development July 2013
POLICY OBJECTIVES FOR IMPOSING TAXES ON MOTOR VEHICLES Government revenue: to finance Govt Expenditure including road infrastructure Transport objectives: to reduce traffic congestion Redistributing income: a progressive tax in relation to cylinder capacity higher income group buy cars with higher cc Environmental objectives: to promote fuel economy and to reduce harmful emissions like CO2 emission
Motor vehicles related taxes 3 broad categories, namely:- Taxes on acquisition: i.e taxes on purchase of a motor vehicle ( Excise duty, CO2 levy/rebate, registration duty) Taxes on ownership: i.e taxes in connection with possession or ownership of a vehicles ( Road motor vehicle licence) Taxes on motoring: taxes related to the use of a vehicle ( excise duty on mogas and gas oil, MID levy on mogas and gas oil)
Taxes on acquisition Excise duty on motor vehicles are imposed at the time of imports and the rates depend on:- - the type of motor vehicle (cars, motorcycles, buses, goods vehicles ); - engine size i.e the cylinder capacity (excise rates for cars of more than 2,000 cc is 100% of the value of import compared to 55% for those of less than 1,600 cc); - the use of the motor vehicle (private cars compared to commercial vehicles); - Ad valorem (%) and on the value of import ( Price of the car and the Exchange Rate);
Taxes on acquisition rates of excise duty Motor cars (inc SUV, Jeep type) Rates : < 1,600 cc 55% of the value of import 1,601-2000 cc 75% > 2,000 cc 100% (Yr 2000, the rates varied between 97% to 297%) Excise duty concession and Exemptions Civil servants 0%, 30% of the rates); Embassies (0%); Taxis (20% of the rates), Returning residents (15%), handicapped persons specially designed cars (15%) Electric cars (flat rate of 25%) (AFD report (2010; EV Indirect C02 180g/km compared to 9g/km in France and 75 g/km in Singapore) Note: same rates are applicable for NEW and Imported SECOND HAND VEHICLES
Taxes on acquisition rates of excise duty Motor cycles Up to 200 cc 0% (abolished in two last budgets ) 201 to 450 cc 45% Above 450cc 100% Double space cabin vehicles 20% Goods vehicles (lorries and vans) 10% Buses Private buses 10% Public buses 0%
Taxes on acquisition CO2 levy/rebate scheme Announced in the 2010 budget and implemented in July 2011 (amendment to the Excise Act) Align our vehicle taxation system with the Maurice Ile Durable (MID) vision. Modify our motor vehicle taxation system to reflect the Polluter Pay Principle and take into account the CO 2 emission standard which is becoming the new practice worldwide. At the same time, we had the objective to safeguard our revenue. Enlist the services of Agence Française de Développement (AFD) and International Monetary Fund (IMF) to advise us on application of CO2 emission on motor cars
Taxes on acquisition CO2 levy/rebate scheme Govt retained the proposal of having a revenue-neutral feebate system, i.e., a Fee and Rebate system (similar to the French system of bonus/malus écologique ), under which a motor car buyer would pay an additional amount as levy (or fee) per gramme of CO 2 per km emission above a set threshold. On the other hand, the buyer would receive a rebate (or subsidy) calculated on the basis of gramme of CO 2 per km if the CO 2 standard emission of his motor car is below the CO 2 threshold. CO2 rebate or CO2 levy is in addition to our Excise duty already chargeable CO2 threshold has been set at 158 g/km as from July 2011
Taxes on acquisition CO2 levy/rebate scheme CO2 > 158 g/km = i.e Excise duty + LCO CO2 < 158 g/km = i.e Excise duty RCO Levy payable (LCO) Rebate granted (RCO) Rate of CO2 rebate/levy Range CO2 Rebate Rate g/ g/km km Up to 90 Rs 3000 91-158 Rs 1000 159-190 191-225 226-290 Over 290 Levy Rate g/ km Rs 2,000 Rs 3,000 Rs 4,000 Rs 5,000
CO 2 -based Levy/Rebate - Singapore Band Carbon Emission (CO2 g/km) Rebate* (From 1 January 2013) Surcharge (From 1 July 2013) A1 0 to 100 S$20,000 A2 101 to 120 S$15,000 A3 121 to 140 S$10,000 A4 141 to 160 S$5,000 B 161 to 210 S$0 S$0 C1 211 to 230 S$5,000 C2 231 to 250 S$10,000 C3 251 to 270 S$15,000 C4 271 & above S$20,000
Taxes on acquisition Registration Fee registration fee payable on first entry into Mauritius or any subsequent transfer of ownership Specific rates (i.e rupee amount) New /imported second hand vehicle :the type of vehicle, engine size, whilst for subsequent transfers, the age of the vehicle is also taken into account. Payable at the Registrar General Office Registration duty payable in the case of hybrid /electric vehicle is reduced by half
First Registration in Mauritius Life of motor vehicle or trailer from the date of its original registration in or outside Mauritius when new to the date of its transfer Not exceeding 1 year Exceeding 1 year exceeding 2 Exceeding 2 exceeding 3 Exceeding 3 exceeding 4 Exceeding 4 exceeding 5 Exceeding 5 exceeding 6 Exceeding 6 exceeding 7 Exceeding 7 exceeding 8 Exceeding 8 exceeding 9 Exceeding 9 exceeding 10 Exceeding 10 Motor cycles of an engine capacity not exceeding 50 cc 2,000 1,600 1,400 1,200 1,100 1,000 900 800 700 600 500 400 Motor cycles of an engine capacity exceeding 50 cc 5,000 4,000 3,500 3,000 2,750 2,,500 2,250 2,000 1,750 1,500 1,250 1,000 Buses, public service vehicles (taxi) ambulances, hearses, lorries, trailers and other goods vehicles 25,000 20,000 17,500 15,000 13,800 12,500 11,300 10,000 8,800 7,500 6,300 5,000 Trucks of pick up type with double space cabin with or without cargo bed (double cab vehicles) 40,000 32,000 28,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 Passenger motor vehicles of an engine capacity: Not exceeding 1,000 cc 12,500 10,000 8,800 7,500 6,900 6,300 5,600 5,000 4,400 3,800 3,100 2,500 From 1,001 cc to 1,250 cc 25,000 20,000 17,500 15,000 13,800 12,500 11,300 10,000 8,800 7,500 6,300 5,000 From 1,251 cc to 1,500 cc 40,000 32,000 28,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 From 1,501 cc to 1,600 cc 50,000 40,000 35,000 30,000 27,500 25,000 22,500 20,000 17,500 15,000 12,500 10,000 From 1,601 cc to 1,750 cc 60,000 48,000 42,000 36,000 33,000 30,000 27,000 24,000 21,000 18,000 15,000 12,000 From 1,751 cc to 2,000 cc 90,000 72,000 63,000 54,000 49,500 45,000 40,500 36,000 31,500 27,000 22,500 18,000 From 2,001 cc to 2,500 cc 120,000 96,000 84,000 72,000 66,000 60,000 54,000 48,000 42,000 36,000 30,000 24,000 Exceeding 2,500 cc 150,000 120,000 105,000 90,000 82,500 75,000 67,500 60,000 52,500 45,000 37,500 30,000
Taxes on acquisition Value Added tax VAT is a tax on consumption, like all other goods, motor vehicles are taxed at 15% on the final price
Taxes on ownership Road motor vehicle licence Paid by the owner of the vehicle Paid on a year basis Collected by the National Transport Authority Based on the type of the vehicle, engine size, weight (goods vehicle), seating capacity Examples Motor cars : Rs 4,500- Rs 15,000 if in a company name, otherwise Rs 3,500 to Rs 13,000 Auto cycle: Nil, Motorcycle Rs 600 to Rs 1,000 Public buses: Rs 3,000 Rs 4,500 Goods vehicles : Rs 3,000 to Rs 18,000 50% reduction for hybrid vehicles and if the vehicles are used in Rodrigues.
Taxes on motoring- taxes on petrol Excise duty on mogas Rs 10.80 per litre Gas oil Rs 330 per litre The MID levy was introduced in June 2008 at the rate of 15 cents per kg of coal, 15 cents per kg of liquefied petroleum gas (LPG), and 15 cents per liter of other petroleum products(mogas, diesel, fuel oil, jet fuel). The rates have been doubled to 30 cents in Nov 2010 Objective of the MID levy: to finance MID projects Mr Ian Parry (IMF 2011) has shown that our MID levy is very close to a carbon tax.
MID levy- Carbon tax Table 3.2. Implementing a Carbon Tax consumption fuel taxes, Rs per unit percent price Fuel Physical CO 2 million units MID CO 2 tax, Rs/t increase due unit coefficient 2010 118 to MID Coal kg 0.0023 660 0.30 0.28 9.4 Fuel oil liter 0.0027 381 0.30 0.32 1.8 Gasoline liter 0.0023 153 0.30 0.28 0.8 Diesel liter 0.0027 376 0.30 0.32 0.9 Kerosene liter 0.0027 291 0.30 0.32 0.8 LPG kg 0.0030 63 0.30 0.35 1.2 Projected revenue, RS million 577 577 Source: Options for Environmental Tax Reform in Mauritius, Mr Ian Parry, International Monetary Fund, Feb 2011
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