Mozambique: Used car dealers slam import duty hike

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Mozambique: Used car dealers slam import duty hike

11:04 CAT | 22 Sep 2017

O País / Used car dealers believe that increasing import taxes on used cars will shut them down.

O País visited some used car lots to gauge the response to the government’s decision to discourage the import of used vehicles more than seven years old and stimulate the import of new vehicles with import duty adjustments.

Managers were unanimous in saying that the measure would hurt businesses already reeling from the economic crisis.

“Last year, I was selling 20 cars a month, but when the dollar went up that fell to 10. With the increase in import duty used cars, our customers – who are already complaining about current prices – will not be able to afford vehicles. In this situation, our business will be unsustainable and we will be forced to close our doors, leaving many families without sustenance from the consequent lay-offs,” sales manager Abu Bahi said.

Also read: Govt approves major changes in import customs duties rates – Mozambique

In another garage, managers said that customers prefered old vehicles because of the ease of finding parts and accessories.

“We are already experiencing customer shortages due to dollar fluctuations even without this new measure. Whenever they come to our lot, customers complain about prices, but we cannot do anything because this is a business and we need to make sure we are all satisfied,” Felisberto Manjate explained.

“This situation will be detrimental to our business. For example, for trucks, customers prefer the older ones because of the ease of getting accessories and servicing. Newer trucks have an electronic pump, which makes life difficult for owners, since our mechanics are not able to move or repair these vehicles. This means that these new vehicles have no clientele because, in addition to being more expensive, they require owners to use the agents in case of breakdowns and they charge a lot more than a mechanic or any vehicle repair garage,” he said.

Our reporter found Leonardo Jorge looking for a car for his own personal use. He said he was against at the measure, which did not take into account conditions in Mozambique, and accused the decision-makers of insensitivity.

“Most of the time those who make the decrees and or laws are people who do not have the same sensitivity as we, peaceful citizens. When we go to a car lot, we worry about the price, but they probably resort to the perks and bonuses they have access to. We have been saving for years to buy a vehicle that is no luxury but a real need, given how deficient public transport is,” he said.

Also read: Government approves import duty hike for used cars – Mozambique

Mr Jorge said the government should debate the suitability of the measure.

“A public hearing should be held to discuss whether this decision is pertinent, and if the country is prepared for the implementation of this measure. We are talking about an environment of [economic] crisis, where it is already difficult to buy a car. Take me, for example: I have been looking for a car for some time, but these prices do not help,” he added.

The government’s proposal still has to go to parliament for approval.

Source: O País