The Chronicle

BULAWAYO, Friday, July 17, 1970 — Cars assembled in Rhodesia will be cheaper from today and this should lead to a reduction in the prices of second-hand vehicles, said Mr Wrathall.

The Minister said that the imposition last year of an excise duty on locally assembled cars had resulted in the motor trade complaining that the duty was too heavy and was a major reason for excessively high prices on new and used vehicles.

“I do not accept this argument,” said Mr Wrathall, “for I believe this situation has developed primarily because of the restricted supply and the choice of new cars being limited largely to the higher price range. The excise duty has been a secondary factor.

“The Minister of Commerce and Industry announced last month that there will be a greater number of new cars in more suitable price ranges and I expect that this will improve the position markedly — but without disposing of the need to re-examine the excise duty. There are two disadvantages to the present excise duty. Firstly, as the duty has a narrow base the rate must be relatively high to produce the necessary revenue.

“And secondly, as the tax is imposed at the assembly stage, it is incorporated into the price at that stage and is subject to mark-up by the motor dealer. By extending the tax base and placing the tax at the retail stage it will be possible to achieve the revenue requirements and some reduction in prices.

“I therefore propose to abolish the motor vehicle excise duty and apply a sales tax of 10 per cent to all motor vehicles, whether new or second-hand, with immediate effect from midnight tonight. This will mean that all such vehicles will bear an additional 5 per cent sales tax”.