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"A Special Case": '96 tax exemptions

"A Special Case": '96 tax exemptions

LAST year was a boon for some auto buyers because the government issued tax-exempt

certificates to select government and military officials. Estimates of the number

of certificates in circulation last year range from 200-400.

The certificates gave a significant boost to sales, particularly for highly taxed

prestige vehicles like Toyota Land Cruisers and Mercedes-Benzes.

The tax-exempt certificates increased Toyota's sales in the tax-free segment by 50-60

percent in 1996, estimates Tomonori Ume-hara, President of TTHK Co Ltd, a subsidiary

of Toyota Tsusho Corp. The most popular model, "Land Cruiser", costs $35,000-$43,000

with full options before taxes. Automobiles are usually purchased in cash, as most

distributors do not offer financing.

Sales in 1996 were "quite successful" for Mercedes primarily due to the

tax-exempt certificates, according Ung Chiv of Mercedes-Benz distributor Hung Hiep

(Cambodia). "If the government issued more [certificates], it would be good

for Mercedes," he says.

Although intended for select government and military officials, many certificates

were traded on the market. The beginning of 1996 saw a certificate selling for roughly

$5000. By the end of the year, the price reached $15,000, observers say.

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