Government’s decision to impose a fuel tax on Barbadian vehicle owners could yield positive results for the environment, a senior Caribbean Community (CARICOM) official is suggesting.
Devon Gardner, the head of the Georgetown, Guyana-based CARICOM secretariat energy unit, today expressed optimism that the new tax, which takes effect on July 1, would drive people towards electric cars.
“Globally, one of the understanding is that you really want to encourage your country and your society towards what we call eco-efficiency. You want to promote efficiency and you therefore typically try to encourage your citizens and society to become more efficient and to promote those things that are cost effective and efficient for the society,” Gardner told Barbados TODAY on the periphery of a CARICOM electric vehicle technology exposition, which formed part of a three-day conference on electric mobility at the Sir Garfield Sobers Gymnasium.
“If we are talking about electric vehicles perhaps being something that is going to lead to greater efficiencies in terms of how we utilize the energy that is already existing and also introduce renewable energy into the transport sector, then maybe the tax might be beneficial and drive the society towards a much more green and efficient transport sector. So taxes which drive people away from some of the lesser efficient vehicles towards more efficient [can have a positive effect].”
Prime Minister and Minister of Finance Mia Mottley announced on June 11, as part of an austerity Budget, that Government would replace the road tax with a levy of 40 cents per litre on diesel and gasoline and five cents per litre on kerosene. The tax is expected to bring in $80 million a year into the Treasury.
However, privately owned public service vehicle owners and operators have complained that the new measure will be detrimental and could drive them out of business.
Morris Lee, the interim chairman of the Association of Public Transport Operators (APTO) told Barbados TODAY on Wednesday that up to half of the estimated 3,000 workers in the sector could lose their jobs if Government insists on maintaining the announced petrol tax without granting a fare rise.
He said the gas tax could cost minibus operators $12,000 a year, a long way above the $3,600 they pay in road and other such taxes.
The AOPT and the Alliance Owners of Public Transport today issued a joint press release in which they indicated that whereas route taxi operators paid $2,250 a year in road and other such taxes, they would be forced to pay $6,741.60 in fuel taxes. For minibuses the expenditure would rise from $3,625 to an estimated $10,861, the release said.
“We acknowledge that the removal of the National Social Responsibility Levy on inputs will lessen the impact somewhat, but this benefit is difficult to quantify and will certainly not offset the increases in operating costs caused by the new measures.
“It is unquestionably wrong for a Government to force private entrepreneurs to subsidize public transportation out of their own pockets and this aspect of our operations needs to be addressed immediately if the sector is to be in a position to continue to offer service to the travelling public come 1st July,” the two transport owners associations said in the release.
However, Gardner said while he was not about to get involved in Barbados’ affairs, the tax measure could help encourage people to become more energy efficient.
He said even if people continued to use conventional fossil fuel vehicles, they should go for those that are more efficient in order to pay less by getting more mileage from the fuel.
“It means therefore if a man wants to pay less taxes he would maybe look towards the more efficient vehicle technologies, including those which are conventional vehicles but also those that are new technologies such as electric vehicles,” Gardner said.
The cost of electric vehicles here currently ranges from just over $40,000 for the more modest, to as high as $380,000 for the high-end type.
Managing Director of Megapower Simon Richards said he believed the tax on fuel was deliberate as the Mottley-led Barbados Labour Party administration moves towards a greener Barbados.
“The tax they say it was quite deliberate to encourage the take up of electric vehicles. It is normal in developed countries to encourage change and you need fiscal incentives. In this case it is removing the road tax from all vehicles and applying a fuel tax to the more polluting,” Richards said.
“So if you have an efficient car you pay less and if you have a dirty, big vehicle and doing most of the pollution on the island you are going to be paying the most. So the dirtiest cars are going to be subsidizing the cleanest cars,” said the electric car dealer who said he expected to see more people showing an interest in the energy efficient vehicles.
Of the more than 100,000 cars on the island’s roads, about 300 of them are electric, a situation Richards blamed on “exorbitant taxes” on the importation of electric vehicles.
Just yesterday officials in the automotive industry indicated that the cost of new vehicles would fall by up to $14,000, with the removal of the dreaded National Social Responsibility Levy, another one of Government’s tax measures.