VIA urged to extend year of import, reduce VAT

by Nilma DOLE

Sri Lankans prefer to buy a Japanese re-conditioned vehicle as opposed to a brand new one because of the economical price and safety standards.

According to the Vehicle Importers’ Association (VIA), Sri Lanka’s reliability in purchasing Japanese re-conditioned cars has a 40 year history.“We commend President Mahinda Rajapaksa for reducing the duty of VAT (Value Added Tax) from 20 percent to 12 percent which was implemented in June 2010 with the depreciation of slabs,” said President of the Association, Yoga Perera. He said that this was commendable for trade and most important for the quick revival of the vehicle trade which was almost at a standstill. Two proposals have been put forward by the Vehicle Importers Association with regard to importing Japanese vehicles.

“Initially the time frame for importation of vehicles was three and a half years which was reduced to two years in April 2010.

Simultaneously, the duty component was also subject to an increase.”

The Association called upon the government to consider extending the year of import to two and a half years.

The reason for this request is based on price reductions as most of the vehicles are subject to Road Licensing Test.

The second proposal by the Association was requesting the government to regulate the VAT component to avoid a double VAT taxation which happens at present.

“If these two proposals are implemented, the importers are in a strong position to supply a reasonably-priced Japanese re-conditioned vehicle amounting to about two million Rupees,” said the Association’s President.

With advanced technology and durability, Japanese cars have become a worthwhile investment with readily available spare parts and mechanics who know how to work on it.

“Unfortunately, cars of sub-standard value are still being imported into the market which is not good and as a professional body, we are committed to giving our customers high-quality reconditioned Japanese vehicles,” said Perera.

Used vehicles are imported directly from Japan and are subject to a ‘Quality Assurance and Safety Report’, adhering to the Euro Standard Conformity.

“This trade is not just buying and selling cars, it is in fact an income earner and employment generator to approximately one million people,” said Perera.

The Vehicle Importers Association has a membership of about 100 and was established 20 years ago.