Reforms to Remove Disparity in GCT Treatments  

 

• Considering the disparity that currently exists in GCT treatments in the second-hand car sales market for private individuals versus registered GCT taxpayers (such as car dealers), the Minister of Finance will be implementing an initiative in the new fiscal year to remove same.
• The reform will see registered motor vehicle dealers paying a rate of 15% general consumption tax (GCT) on the mark-up margin on second-hand car sales, rather than the full price, while sellers continue to pay a flat fee of $12,000 or $18,000.
• This adjustment will reduce the distorted price competition, as well as disincentivise the structuring of off-book sales to avoid taxation, and hence improve compliance and allow TAJ to secure GCT and other taxes on commissions generated by some of these businesses. 

(Source: PWC and JIS News)