New policy for conversion of omnibuses into taxis |06 November 2013

The government has announced a new policy for operators wishing to convert their public omnibus into taxis.

The decision was taken following consultations between the Ministry of Finance, Trade and Investment (MFTI) and the Ministry of Home Affairs and Transport (MHAT).

The aim of this new policy is to eliminate the unfair advantage with regards to trades and excise tax payable by omnibus operators upon conversion of their vehicles into taxis. Currently importers of vehicles to be used as public omnibuses pay a trades tax rate of only 5% and no excise tax on importation of their vehicles, whereas normal vehicles to be used for taxis carry a 25% trade tax and up to 75% excise tax.

The current system provides a loophole in the system whereby operators could import a vehicle as a public omnibus and then convert it into a taxi at a later stage and in the process pay lower trades and excise tax. The government thus found it necessary to level the playing field.

Following this decision, any future applicants wishing to convert a public omnibus into a taxi, excluding cases already being processed by the relevant authorities, will be liable to a conversion fee that will eliminate inequalities in the current system.

The MFTI will issue a detailed announcement regarding the conversion fee at a later stage once the Attorney General’s office has issued the relevant statutory instrument.