By Andrew Adamides
THE PANCYPRIAN second-hand Car Dealers Association yesterday lashed out at government tax plans for the sector, saying their effect on the market would be catastrophic.
Imported second-hand cars were among a series of sectors targeted in a surprise package of tax measures presented to the House last week by Finance Minister Christodoulos Christodoulou. Deputies voted down the package.
The defeated bill proposed to change the basis on which duty for the vehicles was assessed, calculating it on the basis of local market value, rather than value in the country of origin.
At a press conference yesterday, the association accused the government of pandering to new car dealers, and said the bill would raise the cost of imported Japanese second-hand cars to almost that of a new vehicle.
Were this to happen, it said, the second-hand market would “cease to exist”, leaving dealers with thousands of virtually unsellable vehicles.
The association said that car import duty was already high, standing at between 90 and 140 per cent, not including luxury tax, VAT, registration fees, road tax and taxes on accessories.
These accessories include catalytic converters, in spite of government pledges to work for the good of the environment, air conditioning and, shockingly, second mirrors and airbags.
According to the association’s figures, 70 per cent of cars sold are second hand, and there are 300 companies in the sector employing 2,000 people. Nine hundred second hand Japanese cars are arrive on the island every month.
The association said no-one could doubt the benefits of the imported cars, which offered formerly-luxury extras like power steering and air conditioning, and had forced car prices down to half what they were ten years ago, as well as compelling new car dealers to offer higher levels of equipment and better prices in order to compete.
Since they appeared in Cyprus, the Japanese imports have seized a huge chunk of the market as buyers are attracted by the idea of an almost new car at a knock-down price.
In the first three months of this year alone, registration of second-hand vehicles soared by 51.2 per cent, while sales of new cars dropped by 29 per cent.
