DR-CAFTA affect on car prices

No effect. Might even be more expensive depending on when the tax increase goes up.

General rule of thumb down here in DR : prices always goes up !!!

Not all parts of CAFTA will be introduced in one go. I think you will find the parts related to car imports will be implemented over a number of years.

Your better of buying, rather than waiting for something that may take months, if not years to actually happen.

From memory, I believe the import taxes on vehicles will be phased out over a 5 year period.

Excellent summary from Fabio Guzman, attorney, in the legal forum last week.
http://www.dr1.com/forums/legal/56521-american-cars-imported-dr.html

Fabio J. Guzman said:

Duty on American cars will be phased out in 5 years from the time DR-CAFTA first went into effect with any one of the contracting parties (El Salvador, early 2006). Therefore, by early 2011 there will be no duty on the importation of American cars, assuming as we all do, that the DR will at some point implement the treaty.

Presently, duty is at 20%. It will go down to 15% the second year, 10% the third year, 5% the fourth year, and 0% the fifth.

However, there are other taxes that must be taken into account when importing a vehicle, to wit:

(a) ITBIS (service tax) = 16% of the value of the vehicle, incl. shipping and insurance costs.
(b) Registration tax = 17% of the value of the vehicle, incl. shipping and insurance costs
(c) Expenses at customs = 0.4% the value of the vehicle, incl. shipping and insurance costs.

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flo said:

but right now if im buying for example a 2007 toyota camry in the us for 25.000 us, im paying 45.000 us here right now.

now i belive that the free trade agreement consists in eliminating taxes for free trade, and i dont belive that for the camry the shipping cost is 20.000 us.

so what does the free trade do if it doesnt eliminate any impot taxes ?

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Flo:

One of my clients, a fair sized U.S. company involved in the buying and selling of cars, trucks, heavy equipment, scrap steel and parts on a large commercial scale commissioned a study of D.R.-CAFTA as it relates to the scope of their business.

While I am not at liberty to discuss the major details of that rather lengthy and expensive document, I will say that in the opinion of the author "there will be little to be gained in entering the D.R. marketplace with used automobiles as the D.R. curently, and for years to come, has inordinately high internal and external debt levels which will need to be satisfied." "In general terms any tax savings via D.R.-CAFTA will be small as the government seeks to increase other "fees" to offset this loss."

No, the shipping cost from N.Y/N.J. on a 2007 Toyota Camry fully containered may well run around $1,500.00 USD. The real costs are in the port where import taxes, fees and the ITBIS of 16% (which is not part of the "taxes" D.R.-CAFTA refers to).

As Robert has correctly observed the phase out on autos is over 5 years following the implementation of the Agreement. Note also, this refers to U.S. cars only. What constitutes a U.S. car has been discussed in prior threads here on D.R.1 and is still not completely crystal clear.

While there will be other opportunities for trade between the two countries, DR-CAFTA will have little impact on prices of used automobiles in the Dominican Republic designated as "Made in U.S.A."


Respectfully,
Playacaribe2

flo said:

thanks to everyone for the quick replys, you where all very helpful, im going to moca tomorrow and buy a car

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Flo:

Do yourself a favor, after you find a vehicle you like:

1. Bring it to a trusted friend or mechanic to be checked; and
2. Check the Vehicle Identification Number (VIN) with www.carfax.com.

This is the absolute minimum due diligence needed.


Respectfully,
Playacaribe2

Fraud

CFA123 said:

Excellent summary from Fabio Guzman, attorney, in the legal forum last week.
http://www.dr1.com/forums/legal/56521-american-cars-imported-dr.html

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then do the maths, 20% of the vehicle price in taxes today.-After 5 years 16% in ITBIS and 17% in registration plus 0.4 in "?duanas", it comes to a 33.4% in taxes. The TLC is a big fraud !!! all products will have to pay huge internals taxes

JOKL said:

The TLC is a big fraud !!!

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Glad you agree on that one !

Everything will be more expensive...

The DR-CAFTA is maybe the biggest mistake in today's DR history...

No Selective Consumption Tax on US import Cars

01/04/07 Dominican Today article says no duty on USA cars entering DR. Sure hope its true.

Santo Domingo.- The Dominican Government decided to exclude motor vehicles from the Selective Consumption tax as the United States had demanded, being one of the requirements for the Free Trade Agreement to take effect.

Customs director Miguel Cocco provided the information and revealed that an agreement was reached between the parts, overcoming the last obstacle impeding the implementation of the DR-CAFTA.

He said that Customs and Internal Taxes will try to replace those funds to the State coffers, as it will no longer collect them.

"A consensus was reached which was to eliminate the selective tax on vehicles, and the last obstacle has been surpassed,? he said, adding that it would be replaced with the State?s tax-collecting efficiency.

In that regard, the official said that for the authorities there are now no difficulties to enter into the DR-CAFTA.

The decision arose from a meeting of the tax collecting team held in the National Palace, in which in addition to Cocco and Internal Taxes director Juan Hernandez participated the Presidency?s Technical minister Tem?stocles Mont?s.

e.

drtampa said:

"...article says no duty on USA cars entering DR. Sure hope its true."

"...adding that it would be replaced with the State?s tax-collecting efficiency."

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Prices won't go down whatever happens... What you won't pay with your right-hand, you'll end up paying it with your left-hand... Don't place any hope on that pseudo "free-trade" trap...