Importers jittery as Govt. appears firm on issue of used tyres

Mar 11, 2016 News

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By Leonard Gildarie
Government appears resolute on its plans to prohibit the importation of used tyres for cars, pickups and minibuses, but there may be some room for proposals from worried operators.

On Wednesday, several importers attended a meeting at the Camp Street head office of the Guyana Revenue Authority (GRA) to discuss the “ban” announced in January by Minister of Finance, Winston Jordan.
During his reading of the 2016 budget speech in January, Jordan, in announcing a number of measures including tax reductions on cars, signaled Government’s intentions to address the environmental fallout from used tyres and its dumping.
The Finance Minister gave “notice of intent to ban the importation of used tyres and to reduce taxes on new tyres to encourage their use.”
He said that the ban will come into effect as soon as some procedural hurdles are cleared.
The announcement had created worry by used tyre importers who feared a loss of business from their investments.
There are scores of tyre shops around the country with at least 20 containers or an estimated 20,000 used tyres entering Guyana annually.
With the taxes on new tyres too high, many car owners have been opting for the cheaper, used tyres.
Operators have said that vehicle owners will not afford to buy new tyres.

However, the David Granger administration said that there are safety issues involved with the dumping of damaged tyres, a major environmental issue. There were also complaints about some importers bringing in tyres, including ones from countries that have snowy conditions, that are unfit for use in Guyana, a tropical country.
On Wednesday, importers were told that nothing has been made law yet and that their input was needed. It was stressed that the ban was not finalized and what is on the table is a restriction on the importation of used tyres.
The restriction, it was explained, does not necessarily mean a total ban, but could leave room for possibilities like the number of importers.
Yesterday, GRA in a statement of clarification insisted that announcement of the ban (prohibition), still stands.
GRA said that it is retracting any statements made at the stakeholders’ forum that may have given the impression that the budget measure would not be implemented.
During Wednesday’s meetings, it was learnt that importers may be packing up to 1,000 used tyres in a container, not an ideal situation because of the high possibilities of damage.
Present among the officials were GRA’s Head of Project Coordination, Fitzroy Corlette; Deputy Commissioner, Rohan Beekhoo and Gavin Lowe, Deputy Head of Customs and Trade Administration.
Also there at the meeting were Customs brokers.
It was disclosed that importers were not in the habit of detailing specifications on the invoices which are submitted for importation.
Inspectors of GNBS lack the capacity to verify the quality of tyres, with no equipment that could in all practicality test hundreds of tyres that are in each container.
Rather, inspectors are forced to conduct visual checks, not the best practice.
It was pointed out by importers that there must be conformity between the laws and standards.
There have been complaints that police are stopping vehicles and using visual inspections to determine whether a tyre is “bad”.
There are no standards that say what specifications a used tyre must have for it to be acceptable for importation into the country.
Also raised was the possibility of a recycling plant for used tyres that are to be dumped.
However, it was noted that such an investment will raise questions about a steady supply of materials.
According to the GRA officials, the outcome of the meeting will form the basis of a proposal by GRA to the Finance Minister on the way forward.
Currently to import used tyres, all it takes is a business licence and registration with the GNBS.
Corlette disclosed that it is the hope that eventually Guyana would move to the importation of only new cars with new tyres being used.
New tyres for cars currently being imported are normally eight millimetres in thickness. However, there are no standards which demand importers to even bring used tyres that have half of that.
A major issue raised was the misuse of tyres. Too often, tyres are over-inflated or used to carry more weight than is recommended. With tyres that are of unknown quality, the dangers are multiplied for used.
Many times, car owners are given just a few days of warranty, with no written agreements – it is all verbal. On average, a used tyre for a car lasts for up to six months. For taxis, it is an average of about six weeks.
According to one importer, one idea to solve the dumping of used tyres is to implement a tax on importations which could be paid to a recycler. It has been known that used tyres could be recycled and used in road making.
Another major issue raised was that there is no way that the GRA or GNBS could know how long ago a new tyre was manufactured. The Customs invoices do not specify.
GRA officials assured that they will be liaising with importers on the proposals which are to be taken to the Minister of Finance.

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