Luxury Tax to encourage people to buy more fuel efficient cars

Trinidad and Tobago Finance Minister, the Honourable Colm Imbert, announced recently in parliament that the mid-year budget now includes a new “50% Luxury Tax” on the MVT and Customs Duty.

The new increased duties and taxes affects vehicles with an engine size exceeding 1999 cc. but does not include taxis, maxi-taxis, goods vehicles, agricultural vehicles, trucks, private school buses and vehicles used for public purposes.

But how are Vehicle taxes calculated in Trinidad and Tobago?

Below are the rates broken down by engine size and the taxes applied.


Motor Vehicle Tax (MVT) is normally payable at the following rates: 

* engine size not exceeding 1599 cc $3.75 per cc
* engine size exceeding 1599 cc but not exceeding 1799 cc = $4.00 per cc
* engine size exceeding 1799 cc but not exceeding 1999 cc = $8.00 per cc
* engine size exceeding 1999 cc but not exceeding 2499 cc = $21.00 per cc (+ 50%)
* engine size exceeding 2499 cc but not exceeding 2999 cc = $25.00 per cc (+ 50%)
* engine size exceeding 2999 cc but not exceeding 3499 cc = $30.00 per cc (+ 50%)
* engine size exceeding 3499 cc = $45.00 per cc (+ 50%)


Customs duty is normally payable at the following rates:

Customs duty is based on the Cost, Insurance and Freight (C.I.F.) Value of the Vehicle.

* Vehicles with an engine size not exceeding 1599 cubic capacity (cc) = 20%
* Vehicles with an engine size exceeding 1599 cc but not exceeding 1999 cc =  25%
* Vehicles with an engine size exceeding 1799 cc but not exceeding 1999 cc = 30% (+ 50%)
* Vehicles with an engine size exceeding 2000 cc = 30% (+ 50%)


Value Added Tax is payable at a rate of 12.5%.

VAT is calculated in the following way:

  • (Cost, Insurance and Freight Value + Customs Duty + MVT) x 12.5% = VAT Payable

So what does that all mean?

Well lets say for our example, the car in question arrives in Trinidad and Tobago for $100,000 dollars. We call this the C.I.F. or the Cost, Insurance and Freight. Next we need to calculate the M.V.T. or Motor Vehicle Tax. In Trinidad and Tobago this is based on engine size and calculated by the CC or cubic centimetres of engine displacement. Lets say our engine has a displacement of 2499cc (often referred to as a 2.5L engine, common in SUV, Pickups, Panel Vans and lots of other vehicles).

With that in mind and the figures above, we can calculate what the cost of the vehicle would be with taxes.

Cost of Vehicle inclusive of Insurance and Freight (CIF)

$100,000.00

Motor Vehicle Tax (MVT)
(2499 x $21) + 50%

$78,718.50

Customs Duty
CIF x 45%

$45,000

12.5% Value Added Tax
(CIF + MVT + CD) x 12.5%

$26,767.72

 TOTAL

$251,683.31


New April 2016 MVT, Duty and VAT schedule

MVT_duty-Trinidad-2016



 

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