Customs investigates vehicle distributors suspected to have contravened Motor Vehicles (First Registration Tax) Ordinance

7 Dec 2012

The Customs and Excise Department (C&ED) yesterday (December 6) took action to search the premises of five registered vehicle distributors suspected of contravening the Motor Vehicles (First Registration Tax) Ordinance (the Ordinance) by covering up the "Published Retail Prices" (PRP) of vehicles approved by the C&ED, and selling them at higher prices.

In the operation, 80 Customs officers were deployed to search nine locations on Hong Kong Island and in Kowloon and detained a large number of documents and materials in connection with the offence. The persons-in-charge of the vehicle distributors were requested to assist investigation. The investigation is still ongoing.

A C&ED spokesperson said today (December 7) that according to the Ordinance, a vehicle distributor, before offering a motor vehicle for sale for use in Hong Kong, must provide information relating to the price of a vehicle to Customs for assessment of the PRP which was also the taxable value of that vehicle.

Under the Ordinance, the vehicle distributor must publish in written form the PRP and should not sell a vehicle at a price higher than the amount permitted without a prior consent from C&ED. Otherwise, it is a contravention of the law and offenders convicted are liable to a fine of $500,000 and imprisonment for 12 months.

The spokesperson noted that some unscrupulous vehicle traders adopted improper trade practice to raise the approved PRP without applying for approval from the C&ED in order to gain a higher profit. They did not either pay the corresponding amount of the First Registration Tax (FRT) payable on the higher selling prices, thereby causing revenue losses to the Government.

The hiding of the approved PRP will cause consumers to pay a higher price. Such dishonest practices will also severely affect the market price transparency. The C&ED spares no effort in fighting against such unscrupulous traders to protect Government revenue and maintain normal operation of the market so that consumers can enjoy a higher market price transparency.

The C&ED attaches importance to illegal activities of evasion of FRT. Apart from inspecting the vehicle companies and the imported vehicles, as well as verifying the declared vehicle information, the department will also investigate cases referred by members of the public.

The department reminds members of the public to compare the vehicle prices carefully and to ask the distributor to provide the approved PRP list for reference when buying a new vehicle, otherwise it will encourage unscrupulous operations. In case of doubt about vehicle prices, they should make enquiries or complaints to the C&ED (Tel: 2545 6182) or the Transport Department (Tel: 2804 2636).

Ends/Friday, December 7 2012

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