Any immediate changes for the auto sector in this year's budget communication should not be expected, according to the president of the Bahamas Motor Dealers Association (BMDA).
Fred Albury told Guardian Business that a review of the current vehicle import duties should come down to the wire.
The change of government came close to the end of the fiscal year, he said, which would make it difficult for the Progressive Liberal Party (PLP) to fully implement its changes in the 2012/2013 budget communication. Nevertheless, he is hoping some sort of change is forthcoming.
"I am not so optimistic that anything will change regarding the budget for the auto industry this upcoming fiscal year," Albury said. "The new government will not have much time to make changes to the budget that is about to be presented this month.
"What we, the Bahamas Motor Dealers Association, would like is for the government to review with a view to reducing the import tax rate on commercial vehicles. Commercial vehicles had their rate increased to 85 percent, which is very high. Commercial vehicles are important to the economy, as they ferry goods back and forth for the consumer."
The auto tax increases that were introduced two years ago also included an 85 percent duty on vehicles with engines greater than 2,500 c.c., a 75 percent duty on vehicles less than 2,500 c.c. but greater than 2,000 c.c., and a 65 percent duty on vehicles less than 2,000 c.c.
The vehicle duties dealt a blow to the auto dealers, as several local companies admitted that they saw a drop in new car sales. It also enabled the used vehicle market to capitalize, an element that doesn't foster economic improvement.
"The used vehicle market increased considerably, which is not good for the public treasury," he said.
"We have advocated an age limit on used vehicles being imported into the country. This has happened in other markets in the Caribbean so as to stem the large inflows of used vehicles. These used vehicles do not contribute very much to the economy and become derelict, abandoned vehicles in short order. This contributes to the environmental impact on the nation with used tires, batteries, oils and scrap metal."
The benefits of an age limit on used vehicles, according to the BMDA head, include enabling the government to enhance its revenue base and bring in environmental-friendly autos and more fuel-efficient transportation, which allow for more savings at the pumps.
Albury added that other Caribbean countries have a four-year age limit on used vehicles, and it could work in The Bahamas and filter out underhanded practices.
"There is a lot of corruption with the used vehicle imports with undervaluing of invoices for paying of taxes," Albury said. "Once this is done and if more revenue is realized from this age restriction then maybe a reduction in the import taxes on new vehicles can be looked at."
As far as what Albury believes would be an ideal import tax system, he said one that promotes more fuel-friendly autos would be effective.
"I personally prefer an import tax system that encourages the use of smaller engines and fuel-efficient engines," he said. "In comparison to some of our neighbors in the Caribbean, we are still reasonable with our import rates. Maybe one day a value added tax (VAT) whereby every time a vehicle changes hands, then the government will realize a form of tax but at the lower end, would work."

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