The government’s pledge to reclassify car rental companies under the tourism industry hinges on operator’s willingness to phase out fossil fuel vehicles, said Minister in the Ministry of Finance Ryan Straughn on Wednesday, as he signalled that no perks will be given for imports of petrol or diesel cars.
He told Barbados TODAY: “When we met, I indicated to them that, given the level of foreign exchange that they’re bringing, we will work on introducing a mechanism that allows them to report the earnings and therefore be able to transition to being treated as a service.”
But he made clear that there would be conditions for the transition.
“I also indicated to them that that would be contingent on the commitment to move away from fossil fuel vehicles to hybrids and electric vehicles, which we will want to be able to see that Barbados is the greenest part of the world where you can rent,” he said. “That kind of thing is consistent with everything that we’ve been talking about and advocating.”
Car rental companies had raised concerns about concessions, but the finance minister stressed that the government’s policy supports electric vehicle imports.
“They don’t require any concessions given the existing policy that we put in there,” he said. “The only tariff on electric vehicles is the 10 per cent duty that every other business pays.
“Currently, when they import a vehicle which is petrol or diesel, they pay the full tariff and the full VAT and the like, so there’s nothing stopping the car company currently from transitioning to hybrids or EVs.”
Straughn said: “We are not going to incentivise in any way the importation of petrol or diesel vehicles. That was made clear, given government’s existing policy in relation to vehicles.”
The government is currently working with technical officers to verify the foreign exchange generated by the industry, a necessary step before full reclassification can take place, the minister added.
“Once we are able to ascertain fully the amount of foreign exchange that they are earning — which the technical people are working through and can validate — then we will transition them to become a tourism service,” Straughn said. “So, it’s not a bone of contention here… Maybe timing, but there’s no issue.”
He explained that while there was no set date for completion, the process was already moving forward. When asked about a timeline, he said: “Of course, they want it now, but at the end of the day, I outlined to them clearly what would be required in relation to the earning of the foreign exchange, being able to validate that, and then obviously making sure that all of those monies come onshore as part of the country’s earnings.”
The minister also confirmed that discussions touched on the need for electric vehicle infrastructure to support the shift in the tourism industry.
“There was also discussion around the introduction of mobile chargers,” he said. “People are staying at Airbnbs or something, so that the hosts don’t have to invest in a big set of infrastructure. The mobile chargers are something that the operators could provide to the persons renting the car in order to be able to charge.”
Straughn insisted that there was nothing stopping car rental firms from procuring electric vehicles, emphasising that the government’s broader stance remains firm: “We are being consistent with our broad policy in relation to encouraging more electric and hybrid vehicles and discouraging petrol and diesel vehicles.”
louriannegraham@barbadostoday.bb
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