Relevant amendments have entered into force on 1 May. The law was passed a few weeks ago, and will apply only to hybrid cars not older than 6 years.
The explanatory note to the bill states that the mass use of hybrid vehicles will lead to an improvement in the country’s environmental situation, reduce its dependence on imported petroleum products, and will help improve the trade balance.
“Reduction in taxes for hybrid vehicles will also contribute to update the fleet with new and more environmentally friendly cars, in addition, imports of hybrid cars will improve the financial and economic indicators,” the document says.
At the first stage the bill provides for full exemption of hybrid vehicles from excise and customs clearance, but changes have been made, and in the end the deputies agreed on the reduction of customs payments by 50%. The economic feasibility of the initial version of the bill says that the budget will lose about one million per year, as a result of the new law but after the adoption of the new version, the budget losses were reduced to GEL 450 000.
According to importers, the reduction of customs duties will lead to an increase in consumers’ interest to purchase hybrid cars. In particular, according to Alexander Tsitsvidze, Director of myavtoshop.ge company, buyers of hybrid cars are focused mainly on cost savings because they consume much less fuel.
“Hybrid cars cost in 2010 at least $ 15 000. If the cubic capacity of the engine is 3.5, the excise tax is GEL 2,450. In general, customs payments reached 3 000. The new law will save about GEL 1 225 that is almost $ 500. It’s a lot,” he says.