Logo of Phnom Penh Post newspaper Phnom Penh Post - CAIF calls for taxes on used cars, import ban

CAIF calls for taxes on used cars, import ban

New cars are displayed at an authorised dealership in Phnom Penh last year.
New cars are displayed at an authorised dealership in Phnom Penh last year. Pha Lina

CAIF calls for taxes on used cars, import ban

The Cambodia Automotive Industry Federation (CAIF) has asked the government to increase taxes on vehicles sold in the grey market and prohibit the import of second-hand cars in order to protect the interests of consumers and level the playing field for authorised car dealers, it said in a press release yesterday.

The federation, which consists of more than 20 authorised automobile distributors, said it will ask the government to impose a 150 per cent tax on all grey market vehicles, and consider banning the entry of second-hand cars in line with similar practices followed in other ASEAN member nations.

“Now it is almost like a penalty to sell authorised cars because grey market sellers are playing the invoices of these cars and selling them for less,” CAIF president Peter Brongers said.

He explained that authorised dealers were expected to pay upwards of 100 per cent in taxes for legal imports of new vehicles, whereas many grey market sellers were not charging consumers value-added tax.

This meant that of the around 45,000 cars imported last year, of which 10 per cent were by authorised dealers, close to 40,000 vehicles were sold without paying the correct amount of taxes, Brongers said.

The CAIF will launch a campaign this year to educate potential car buyers of the risks of buying from non-authorised dealers, suggesting that they look at the conditions of the vehicle rather than just price, he added.

Another demand from the group is a complete ban on second-hand cars or prohibiting the import of cars older than 10 years, referring to similar restrictions in Vietnam where cars older than five years cannot be imported.

According to the federation, seven ASEAN members currently prohibit the import of second-hand vehicles and the lack of a similar regulation in Cambodia has made the country the “junkyard” of ASEAN.

“We are the only country that allows the import of used cars, so all the bad cars come here,” Brongers said. “We are getting cars that other countries are taking off their roads.”

The import of new and used cars grew by 10 per cent last year, with the industry expecting a similar increase this year. Authorised dealers account for just one in 10 of all vehicle sales, according to CAIF estimates.

MOST VIEWED

  • US to ramp up sanctions after ‘flawed’ national polls

    At a press conference on Wednesday, the US State Department announced that it would expand visa sanctions on the Cambodian officials and individuals it deems responsible for “undermining democracy” in Cambodia. At the briefing, spokesperson Heather Nauert reiterated that the department regarded the July 29 elections

  • Final poll results confirm first single-party Assembly

    IN an unprecedented situation in Cambodian politics, the official results of the July 29 national elections have declared that the Cambodian People’s Party (CPP) will take all 125 seats in the National Assembly on the back of it receiving 76 per cent of the votes. The National

  • Kingdom is at a crossroads between East, West after poll

    It was dubbed a success by caretaker prime minister Hun Sen after the electoral victory of his Cambodian People’s Party (CPP), which is poised to take all seats in the National Assembly. But the July 29 national election has not been positively looked at by

  • Chinese influence to sweep Kingdom?

    Growing Cambodia-China ties have seen the latter’s influence sweep across the Kingdom through increased investments and tourism. The Asian giant has become the leading source of foreign funds in Cambodia, fuelling the construction sector with huge casino and hotel projects. Much of the growth