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December 16, 1997
(Finance)

 

The following statement was issued today by Paul Dicks, Minister of Finance. It was also read in the House of Assembly:

Use of affidavits in combination with the Red Book valuation system

Members of the legislature are aware we tabled legislation to deal with a serious problem related to the taxation of motor vehicles. Government has reviewed the situation, and our research indicates that the purchase price of vehicles which is reported to the Motor Registration Division appears understated. I tabled information respecting this in the House just a short time ago.

What the government is proposing, is a system which would not penalize honesty, but would deter dishonesty and abuse. We want everyone to be on a level playing field, so that an honest person who pays tax on the actual purchase price does not have to pay more than someone who deliberately understates it in a private sale.

Over the past few weeks, the Honourable Members and the public have been aware that government was considering a system which uses values contained in the Canadian Red Book combined with the right of appeal. We have heard from Members of this House and taxpayers on this issue and we have listened to their concerns.

We believe that in a very high percentage of transactions, the actual purchase price is near the book value. However, government also recognizes that vehicles may legitimately be sold for a purchase price below book value. This may be for varying reasons, including rust damage, excessive mileage, or simply because an individual is getting a good deal.

Today we are announcing a system which combines the Red Book Valuation System with affidavits. Purchasers will be able to obtain Red Book information through a toll free number provided by the Department of Finance so they can determine the book value before they register their vehicle with the Motor Registration Division.

If the purchase price is less than the average wholesale value in the Canadian Red Book, both the buyer and the seller must swear to a Justice of the Peace or Commissioner of Oaths, an affidavit specifying the purchase price of the vehicle. This affidavit will be required at the time of registration. Taxpayers can use a Justice of the Peace or a Commissioner of Oaths of their choice, or can avail of that service free of charge at a Motor Registration Division office or a provincial taxation office.

The affidavit will specify that it is an offence to provide false information, and a person found guilty of such an offence is liable for fines up to $10,000 and/or imprisonment for up to two years.

Affidavit forms will be made available at all Government Services Centres around the province, through Motor Vehicle Registration, from Department of Finance offices, and from Government's site on the Internet.

This program will be implemented on a one year trial basis and results will be reviewed at end of that time.

1997 12 16 2:15 p.m.

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