Prices of Vehicles have increased once again with effect from today.
The reason for this is the amendments made to the Unit Rate Tax by the government, being implemented. It was proposed through the Budget to impose the Unit Rate Tax based on the engine capacity and the value of the vehicle. It was the greater of these two figures that acted as the base for tax.
However, the Ministry of Finance points out that since many undervalue their vehicles, and thereby pay less taxes, the government loses out on a major slice of revenue.Therefore the tax charged based on the engine capacity of the vehicle has been increased.
The Ministry of Finance also pointed out that the aim of the New Unit Rate Tax is to decrease the taxes on vehicles with smaller engine capacities, and to hike the taxes on luxury vehicles bearing larger engines.
Relief has been provided through the amendments by decreasing the duty imposed on vehicles with an engine capacity less than 1000cc. However, vehicle importers point out that the prices of all vehicles, except for motorcycles, will increase through the new tax amendments.
The Ministry of Finance has issued a gazette notification with regard to the documents that need to be submitted when estimating the value of a vehicle.
The Ministry points out that the aim of this move is to reduce the possible fraud and corruption that could take place through the Unit Rate Tax amendment and the procedure of valuing vehicles.
(Source: News First)