October 16, 1998
(Finance)

Red Book system for used vehicle sales effective October 19

Finance Minister Paul Dicks today announced a new system to promote fairness among private vehicle sales, which will come into effect on Monday, October 19.

The system will enable vehicle purchasers to calculate the amount of tax required on the sale of private vehicles based on the Red Book value. Purchasers will be able to obtain Red Book information through a toll free number provided by the Department of Finance to determine the book value of a vehicle before registering it with the Motor Registration Division. If the purchase price is less than the average wholesale value indicated in the Canadian Red Book, both the buyer and the seller must sign a witnessed 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 Government wants to ensure that all Newfoundlanders and Labradorians are on a level playing field when it comes to the private sale of vehicles," said Minister Dicks. "I am pleased that honest people will no longer be left in the position of paying a higher tax on private vehicle sales."

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. Minister Dicks said: "This will deter abuse by dishonest persons who understate the sale price of vehicles on bills of sale in an attempt to pay a lower tax."

Brochures outlining the Red Book system for vehicle valuations, and sample copies of affidavits and standard vehicle appraisal forms will be available to the public from the Motor Registration Division, from Government Service Centres and from the Tax Administration Division of the Department of Finance.

Media contact: Paula Dyke, Communications, (709) 729-0329.

1998 10 16                 1:15 p.m.