Some auto importers say that following the sharp increase in customs duties on vehicles older than six years, a growing number of consumers have shifted toward importing even older cars from the 1990s.
According to Elguja Jamagidze, founder of Robani Motors, buyers are increasingly choosing so-called “exclusive” vehicles manufactured in the mid-1990s because they are subject to lower excise taxes and customs costs.
Jamagidze argues that this trend calls into question one of the government's key justifications for raising vehicle excise taxes - improving environmental standards.
“The reform was presented as a way to improve air quality and environmental conditions, but whether that goal will actually be achieved is highly questionable. As taxes increased for vehicles older than six years, many consumers turned to even older cars. We are already seeing a significant number of imports of vehicles produced in 1995-1996 because their excise tax is lower,” he said.
He noted that these older vehicles generally comply with lower emissions standards, such as Euro 3 and Euro 4, rather than the more environmentally friendly Euro 5 standard.
“Instead of encouraging cleaner vehicles, we are effectively taking a step backward. From an environmental perspective, the outcome could be the same or even worse,” Jamagidze added.
The auto importer also pointed to another unintended consequence of the policy: older vehicles that owners had planned to scrap or sell for parts are being restored and returned to the roads.
“Many cars that were previously sitting idle and were expected to be dismantled have been repaired and put back into operation. As a result, the environmental objective that was cited as a key reason for the tax increase has not been achieved,” he said.
Industry representatives continue to debate whether the higher excise taxes are effectively modernizing Georgia’s vehicle fleet or simply changing consumer behavior in ways that undermine the policy’s environmental goals.
