Chambers welcome tax on vehicles
The Business Chambers commended the move by the Government to
increase the vehicle import tax which will help bridge the widening
trade deficit and address environmental pollution due to vehicle
congestion in cities.
The National Chamber of Commerce of Sri Lanka (NCCSL) hailed the
recent increase in vehicle import taxes as a move that will save foreign
exchange and reduce traffic congestion in cities which contributes to
environment pollution said NCCSL Secretary Sujeiva Samaraweera.
He said that while the Chamber welcomed the tax increase as a
positive step to address the balance of payment issue it has raised
concerns on the injustice caused to those who had already imported
vehicles. The Chamber has called upon officials to formulate a mechanism
to address the grievances of vehicle importers”, Samaraweera said.He
said that the Chamber has called upon the authorities to reconsider
taxes on motorcycles which are provided to a large number of private
There has been a huge influx of vehicles into the country since the
reduction of import taxes on hybrid vehicles in mid 2009.
The staggering import tax was slashed to encourage more import of
vehicles for an effective transportation in the country. Samaraweera
said that many petrol-driven luxury vehicles such as Prados and SUVs
which are not fuel efficient were imported under the previous tax
The NCCSL commended the Government for not imposing taxes on the
importation of buses and trucks which are vital for long haul
transportation and port activities.
Sri Lanka Chamber of Small Industries President Aloy Jayawardena said
that the increase in vehicle importation tax is a sound move to curb
trade deficit and reduce traffic congestion. He said the tax on vehicles
will discourage importation of vehicles which is vital to reduce the
vehicle density on roads.
The American Chamber of Commerce President, Vijaya Ratnayake said .
Vehicle importers said that sales volumes will drop drastically as a
result of the increase in import taxes. Industry experts said that auto
makers exporting to Sri Lanka will pass on the burden of an import duty
hike to consumers.
The Government increased the import duty on automobiles to contain
the rising fiscal deficit. The import duty on cars increased from
120-291 percent to 200-350 percent on three-wheelers from 51-61 percent
to 100 percent and two-wheelers from 61 percent to 100 percent.
However, duty on buses, trucks and tractors remains unchanged. Sri
Lanka is a vital export destination for several Indian auto makers such
as Bajaj Auto Ltd and Maruti Suzuki India Ltd.
Bajaj Auto, India’s largest exporter of motorcycles and three-wheeler
exported 10,7691 units in the fiscal year ending March 2012, which is a
54 percent increase over 2011.
Reconditioned vehicle importers said that they would have to close
down their business making one million employees redundant unless the
Government rescinds its decision to impose taxes and other restrictions
on motor vehicles.
Meanwhile, there had been allegations levelled against the
authorities that the vehicle import tax was increased to please the IMF
as one of the conditions of the Monetary Fund to address the balance of
payment in the country.
Deputy Secretary to the Treasury S. R. Attygalle said the decision to
raise the import tax on vehicles was taken for the economic development
of the country. The tax revision was made to tosave foreign exchange and
minimise expenditure on fuel.