Government considers incentives for old vehicles, officials say
Posted by meb at September 14th, 2009
Following the end of extended tax reductions for motor vehicles on Sept. 30, the government is expecting to keep the lights on at the Turkish automotive industry with a different version of incentives.
Speaking to the Anatolia news agency, officials from the Finance Ministry said the government could introduce incentives for the replacement of old vehicles with new ones. Having initially introduced tax cuts on motor vehicles on March 16 for a period of three months, the government decided to extend the terms for another three months on June 15. The private consumption tax (ÖTV) on motor vehicles with engines of up to 1,600 cubic centimeters was set at 27 percent, while the tax on commercial vehicles was changed to 3 percent. Extended for a second time, the tax incentives are due to expire at the end of September.
Noting that they have studied examples of incentives for old vehicles in foreign markets, the Finance Ministry officials said the government could consider introducing such incentives in the coming months, expecting to keep the recovery going in the auto industry. Encouraged by recent tax cuts, the Turkish auto sector has enjoyed a remarkable increase in sales.
As one Finance Ministry official put it, incentives for old vehicles are not new in Turkey; they were introduced in 2003. The government introduced an ÖTV reduction in 2003 for people who scrap vehicles older than 20 years to buy a new car. However, the incentives were misused by some auto dealers. “Some of the auto dealers collected most of the old vehicles to benefit from the incentives,” he said. In another similar incentive program, the government decided to reduce the number of aging vehicles on the roads in March of this year.
The incentives aim to boost new vehicle sales and decrease accidents.
The Finance Ministry official said that more than introducing incentives for old vehicles, the government places heavy importance on making necessary legal adjustments. Making mention of studies still under way on the issue the official said the new incentives could cover a variety of applications for motor vehicles of different ages. “We are considering introducing incentives for people who have owned a car for at least the past one year. Also, three different tax cuts for vehicles aged 10, 15 and 20 years are on the table.” The officials also said incentives for old vehicles could be made permanent.
The Economic Coordination Council is expected to discuss the new program in its meeting at the end of this month. The Cabinet will have the final say on the issue.
source: Today’s Zaman
Related posts: