The proposed rates will make cars more expensive and cause the market to shrink.
The tax would apply to the import of new and used vehicle and to those assembled or produced in the country.
The creation of tax on first time registrations will substitute custom duties and establish rates between 10 to 2000 percent higher than what is currently charged for new vehicles.
In the first quarter of the year new car sales have grown by 21% compared to the same period in 2010.
Toyota, Audi and Nissan are just some of the brands whose vehicles sales have increased dramatically during the first three months of the year in Guatemala.
Although the earthquake in Japan affected the production of some plants, Toyota for example, as well as the distribution of paints and other supplies, it was not enough to affect the availability of vehicles in the country nor sales.
Guatemalan importers of used vehicles are contemplating filling a lawsuit, based on the inconstitutionality, against the First Registration Tax (known as Iprima) which came into force since on July 1st 2012.
Claiming that the tax is inequitable, in the course of this week the Union of Used Vehicle Importers, expects to file an appeal against three paragraphs of Article 109 of the Iprima Act.
The recently approved tax reform seriously affects operating conditions for this market.
The recently approved tax reform prevents vehicles which are more than 7 years old from being imported and establishes a tax known as First Registration of Vehicles (Iprima in Spanish), representing a rate calculated on the estimated market price and not the import price.
Sales of new cars at the end of 2012 in Nicaragua will total over 12,000 units.
Data published by the Central Bank of Nicaragua (BCN) indicates that during the first five months of the year imports of sedans, vans, minibuses, trucks and ATV’s have gone up relative to previous years, surpassing even the 2008 statistics.
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