Vehicle importers lament tax increase

Tax on Motor Vehicles Sri Lanka

‘Reconditioned vehicle’ importers yesterday lamented that they will have no option but to close down their business making one million employees redundant unless the government change its decision to impose taxes and other restrictions on motor vehicles.

Their main grievance was not the increase of taxes on vehicles but the reduction of the life span of vehicles permitted to import from two year old vehicles to one year for motor cars and to three and half years from five years for vans and SUVs.

As a result of the hike, a 1000 cc car would attract a total tax payment at the point of import at 200% as opposed to 120% earlier. Petrol- driven three-wheelers, would now be paying a total tax of 100% of the value against the previous 51%. According to the Treasury, vehicle imports have gone up from 3,421 units in 2009, to 37,134 units in 2010, and to 54,285 units in 2011.

However, the President of the  Vehicle Importers Association of Sri Lanka (VIASL) president Yoga Perera told the media yesterday that the biggest blow to the industry was the reduction of age of a motor car permitted to import to one year from two year and vans to three and half years from previous five years.

“The price of a family motor car will rise from a minimum Rs. 1.2 million to nearly Rs. 5 million according to their CC capacity which will be unaffordable for a middle class family. The members of VIASL will not be in a position to carry out their trade as usual under the circumstances. It is impossible for us to do buisness in this situation and one million employees attached to the industry will be at risk losing their employment,” Mr. Perera stressed.


Courtesy: DM Online