Government Acts On Motor Vehicle Tariff Drawback

  • John Luxton

Hon John Luxton, Minister of Commerce, and Hon Tuariki John Delamere, Minister of Customs, announced that regulations had been made today, which came into force from 3pm this afternoon, that will prevent vehicle importers and dealers obtaining duty drawback from the export and immediate re-import of unsold vehicles not covered by the duty refund scheme for motor vehicles announced in the 1998 Budget.

Mr Luxton said today:
'The new regulations provide that duty drawback will be allowed on vehicles only where the exporter satisfies the Chief Executive of the New Zealand Customs Service that the vehicle is not intended to be subsequently imported into New Zealand within a 12-month period following the date it is exported from New Zealand. This condition applies to any vehicle exported on or after 3pm on 25 May 1998 and covers all motor vehicles of tariff heading 87.03 (excluding motor homes and ambulances) and light commercial vehicles of tariff heading 87.04.'

'The exporter can prove this intention by producing a contract of sale for the vehicle or by providing some other evidence that it is not intended to re-import the vehicle within 12 months.'

'The duty drawback provisions of the Customs and Excise Act 1996 exist for a good reason, to assist bona fide exporters whose final product contained dutiable inputs. The motor vehicle industry's actions to export and re-import vehicles fall well outside the intent of this provision. Its actions also fall outside the scope of the Budget announcement which provided for duty refunds on unsold stock less than three months old.'

'The most recent figures obtained by officials indicate that very large numbers of vehicles may be involved. Some estimates are as high as 10,000 vehicles. Given the significant revenue implications likely to be involved, the Government, therefore, had no alternative but to act quickly to prevent such a practice taking place.'

Copies of the regulations are available from the New Zealand Customs Service.