Trinidad and Tobago’s Customs and Excise Division has introduced a sweeping tax change that will reshape the local automotive import market, reclassifying vehicles fitted with Smart Mild Hybrid Vehicle (SHVS) technology as non-qualifying for existing hybrid vehicle tax concessions. Issued on July 22, General Order No 24 of 2026 formalizes the new ruling, which imposes a 20% customs duty on all imported SHVS-equipped vehicles, on top of the standard 12.5% value-added tax. The regulatory shift directly affects six popular passenger vehicle models produced by two major Asian automakers: Maruti Suzuki’s Fronx, Grand Vitara, Swift, Ertiga and XL7, plus Toyota Kirloskar Motor’s Urban Cruiser Taisor.
The core point of contention behind the new classification is Customs’ official interpretation of what qualifies as a hybrid vehicle. According to the ruling, SHVS systems do not meet the concession eligibility criteria because the technology’s integrated electric motor “does not function as a motor for propulsion.” This definition has been met with fierce pushback from across the local automotive industry, which argues the classification is factually incorrect and implemented without proper stakeholder engagement.
Rhondall Feeles, owner of Millennium Auto Dealership and vice president of the Cunupia Business Chamber, pushed back directly against Customs’ core claim, confirming that mild hybrid systems do contribute to vehicle propulsion. Feeles explained that SHVS technology pairs an internal combustion engine with a rechargeable electric system to power vehicle movement, which aligns with the existing regulatory definition of a hybrid vehicle outlined in concession policy. He noted that the confusion stems from Customs’ requirement that the electric motor must independently propel the vehicle to qualify, a threshold that is not written into any existing hybrid regulation.
Feeles drew a distinction between current mild hybrid models and older micro hybrid systems at the center of a previous court case, where Customs successfully argued micro hybrids did not qualify for concessions because their batteries only powered accessories, not propulsion. “The mild hybrid, though it contributes less to propulsion than a full strong hybrid, still does propel the car,” Feeles emphasized. He warned that the sudden, unannounced policy change will trigger widespread financial disruption for both licensed importers and individual consumers importing vehicles privately, and called on Customs to engage in urgent consultations, introduce a grace period for vehicles already purchased or in transit, and coordinate with relevant government ministries to adjust the policy.
Visham Babwah, president of the Trinidad and Tobago Automotive Dealers Association (TTADA), joined the call for urgent discussions with Finance Minister Davendranath Tancoo and senior Customs officials. Babwah highlighted that the new tax is being applied retroactively to vehicles that have already been imported and are currently awaiting customs clearance, a practice he described as fundamentally unfair to consumers who already locked in purchase agreements based on previous tax rules. He estimated that the combined new duties will add between $40,000 and $50,000 to the retail price of affected vehicles, a cost increase that will price many local consumers out of the market for new cars. Many buyers have already secured auto loans based on the original lower price, and banks will not approve additional lending to cover the tax gap, forcing many customers to cancel their purchases entirely, Babwah explained.
Babwah stressed that the local automotive sector is already grappling with significant economic headwinds, including slowing sales and high unemployment, making the sudden tax increase particularly damaging. “A hybrid is a hybrid. A mild hybrid is still a hybrid vehicle,” he said, reaffirming the industry’s position that SHVS vehicles should remain eligible for concessionary tax treatment.
Major import firms have also publicly criticized the policy, describing the decision as an unannounced “overnight” rule change that caught the entire industry off guard. RORO Importers noted in a public Facebook post that dozens of vehicles are already sitting at port or in transit to the country, and businesses have no way to absorb the unexpected additional tax costs. The company warned that drastic new price increases will push consumers to buy higher-mileage used vehicles instead of new, safer models.
Eurojapan Motors Ltd. echoed these concerns, saying that industry leaders had repeatedly requested advance clarification on potential classification changes from regulators, and were assured any adjustments would be shared via official public notice. Instead, the company said, “No warning, no circular, no transparency, and no dialogue were provided.” The firm confirmed that vehicles and their import documentation have already been detained by Customs, which has notified dealers that the SHVS models will now be processed as non-hybrid vehicles for tax purposes. “We feel blindsided by this decision,” Eurojapan Motors said, estimating that the new duties will increase total vehicle prices by 35% or more. The company noted that the price hike harms not just dealers, but also consumers who have already placed deposits on affected vehicles and those that have already been shipped. One example cited by the firm: a vehicle previously priced at approximately $155,000 will now cost consumers around $215,000. Eurojapan Motors is calling for fair, transparent treatment and a transitional grace period for all vehicles already ordered or en route.
Opposition political leaders have also joined calls for government accountability. Former prime minister Stuart Young has demanded the administration provide a full public explanation for the targeted new tax, while People’s National Movement deputy political leader Sanjiv Boodhu has questioned whether all importers will be treated equally under the new classification rules. Boodhu noted that the new SHVS duty is just the latest in a series of broad tax and fee increases that have driven up the cost of living for local consumers in recent months. Those increases include a doubling of duty on rum and spirits, a 100% rise in customs declaration fees and container examination charges, a doubling of the environmental tyre tax, a new 10% duty on luxury electric vehicles priced over $400,000, and a new 5% import tax on single-use plastics to fund recycling programs.