Cut on import duty hailed

by Lalin FERNANDOPULLE

Motor traders acclaimed the move by the President to slash the duty on imported vehicles to develop transportation and tourism in the country.

In a sudden move the Government gashed the excise duty on vehicles by 50 percent and removed the 15 percent surcharge on all imports on Tuesday.

Managing Director Stafford Motors, Dr. Kalinga Kaluperuma said the decision to reduce the import duty on vehicles looked attractive but the final results of the taxation has to be looked into.

He said the vehicle market was down in the previous years and added that the company was able to sell only a car per month.

“The prices of vehicles will drop by around 15 percent following the reduction in the duty”, he said.

Chairperson, Ceylon Motor Traders Association (CMTA), Zeeniya Rasheed said the duty reduction is a positive move that would help reduce prices of vehicles.

“Prices of vehicles would drop by around 25-30 percent as a result of the slash in the duty”, Rasheed said

The Association and vehicle agents have been lobbying for a reduction in the taxation on imported vehicles for a considerable time.

The cut on import duty will benefit traders who had lost sales by over 50 percent due to the exorbitantly high taxes.

The purchase of vehicles had declined due to the 300 percent import tax on a vehicle.

Vehicle agents went through one of the worst periods of the industry due to the sharp drop in sales last year.Top vehicle importers were adversely affected by the shrinking market.

Administrative Manager, Eicher, Associated Motorways, Mahendra Rajapaksa said the tax concession will help expand the vehicle market and enhance productivity of industries in the country.

“The tax relief has come at a right time when the company is planning to enter the passenger segment this year” he said.

Vehicle merchants said the stagnant motor vehicle market will grow at a rapid pace with more households owning vehicles. A vehicle is no longer a luxury item but an essential commodity for a better lifestyle.

The excise duty on motorcycles have been increased by around 70 percent resulting in a surge in prices.