Government scraps tax increase on import of vehicles effective January 1, 2022 |18 September 2021

The government has announced the removal of the temporary increase of 25% of excise tax applicable on the importation of motor vehicles, effective on January 1, 2022, as per sub-regulation 2 (b) of S.I 163 of 2020.

The decision to remove the temporary increase was taken by the cabinet of ministers in its meeting held on September 8, 2021.

The temporary increase came into force on January 1, 2021, as stipulated in S.I 163 of 2020.

The cabinet of ministers has also agreed to amend the Customs Management Passenger Allowance Regulations 2018 (SI 52 of 2018), to bring parity in the treatment of goods imported in excess of the crew allowance versus that which is applicable to normal passengers.

Subject to the amendment of these regulations, crew will then be charged taxes only on declared goods brought in, in excess of their allowance, rather than the whole consignment, as is currently the case.

Note that any undeclared goods are still subject to penalties, as prescribed by the Customs Management Act, 2011.

Press release from the Trade division of the Ministry of Finance, Economic Planning and Trade