Customs investigates motor vehicle distributors suspected of violating the Motor Vehicles (First Registration Tax) Ordinance

24 Mar 2012

Hong Kong Customs yesterday and today (March 23 and 24) took enforcement actions to investigate motor vehicle distributors suspected of violating the Motor Vehicles (First Registration Tax) Ordinance (the Ordinance).

In the operation, Customs officers had searched 66 companies selling motor vehicles and invited 85 persons, involving proprietors, salespersons and clerks, for assistance in further investigation.

It was suspected that some motor vehicle distributors trading in parallel-imported vehicles were selling the vehicles at prices higher than the Customs-approved "Published Retail Prices".

According to the Ordinance, companies importing vehicles for selling locally are required to submit the price information of the vehicles to the Customs for approval of the "Published Retail Prices" of the vehicles. The First Registration Tax of a vehicle is calculated according to the "Published Retail Price" of the vehicle, and the company should not raise the retail price when selling the vehicle.

The company has to re-submit the application to Customs for a new "Published Retail Price" if there is any change in the retail price of the vehicle put on sale; otherwise, the company will contravene the law.

Officers of the Transport Department (TD) suspected some companies selling motor vehicles had violated the Ordinance while processing their applications for vehicle registration. The cases were referred to the Customs for follow-up investigation. After preliminary investigation, the Customs found 66 companies suspected of selling their vehicles at prices higher than the "Published Retail Prices" with 331 vehicles involved. Based on the information gathered, the Customs took enforcement action yesterday and today, and investigation is continuing.

The Customs advises members of the public who plan to buy new vehicles should ask the distributor for a "Published Retail Price" list for reference. The buyer can verify the retail price with the Customs or the TD should there be any doubt.

Under the Ordinance, it is an offence for selling a new motor vehicle at a price higher than the "Published Retail Price" without the consent of Commissioner for Transport. Offenders convicted are liable to a fine of $500,000 and imprisonment for 12 months.

Ends/Saturday, March 24, 2012

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