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Sunday, 8 April 2012





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The Ministry of Finance and Planning increased duty on motor vehicle imports last week. The increased duties resulted in vehicle prices going up by Rs. 300,000 to Rs. Five million. Here are some viewpoints.

Govt. must check vehicle influx

Senior Minister for International Monetary Cooperation Dr. Sarath Amunugama.

Q: What makes the government to take such a drastic step to increase vehicle import duties?

A: The increasing influx of vehicles is natural for a country emerging from a 30-year conflict.

Vehicles such as buses and lorries contribute to the economic growth while other vehicles directly benefit consumers. The former are left unaffected by the new taxes. It is the consumer who is affected by increased taxes. Adjustments need to be made in lieu of the country's balance of payments gap. There are a large number of vehicles on the road and fuel consumption is high. It is necessary to rethink about this issue. The Government heeds to look into the proliferation of vehicles.

Road congestion has to be eased

Acting Media Minister Lakshman Yapa Abeywardena

Q: How do you assess the tax increase on vehicle import?

A: The Government reduced taxes on vehicles by 50 percent in 2009 enabling the people to buy vehicles. Many people were reluctant to buy vehicles due to the fear of LTTE terrorists bomb explosions before 2009. At present on an average one in every five Sri Lankans owns a vehicle. If the present trend continues, in another two years increasing congestion on the roads would pose severe difficulties to motorists.

211,679 vehicles were imported to Sri Lanka in 2009 and it has increased to 523,963 in 2011.

Increased taxes will have no impact on the local vehicle market, it will recover soon with the passage of time.

Tax increase will impact vehicle imports

Executive Director- Sathosa Motors Tilak Gunasekera

Q: How will the tax increase affect the vehicle imports?

A: Essentially tax increases will have a huge impact on vehicle imports. There will be very little business in the near future. Even small cars will be out of the range of middle class consumers. We need to re-think our marketing strategies. There will be a significant drop in vehicle sales this year.


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