Members of Parliament will be exempted from paying import duty and Value Added Tax (VAT) on a motor vehicle if they purchase one while serving as parliamentarians. Bills to amend the VAT Act and the Customs Tariff Act to facilitate this exemption were introduced in Parliament last week as part of the 2024-2025 Budget laws.
The parliamentary committee on MPs remuneration, in its report tabled in May, recommended that the Prime Minister, Cabinet ministers, and members of Parliament should be allowed to buy one vehicle without paying taxes and duties. The committee highlighted that this benefit was available to MPs before 2007 and argued for its reinstatement given the extensive travel required in their roles.
The Customs Tariff (Budget Amendment) Bill 2024 introduces a new concession code to exempt duty and VAT on the importation of “only one motor vehicle” for a Member of Parliament. MPs must purchase the vehicle within their parliamentary term to qualify for the exemption.
However, under section 17 of the Customs Tariff Act, any person who sells an item imported on a duty-reduced basis within five years must pay duty on the value of the item at the time of sale.