'Vehicle import duty reduction will boost growth'
The sale of vehicles of all categories has dropped by around 40
percent this year due to the staggering import duty, said Ceylon Motor
Traders Association, Chairman, Tilak Gunasekera. He said that vehicle
sales would slump by over 50 percent by the end of this year due to the
high import duty. Vehicle registration last year fell by around 40
percent to 360,000 units.
The Association called upon officials to retain the duty ratio on
single cabs but to-date there has not been a favourable response.
Reduction in vehicle import duty will be an incentive for people and
commercial establishments to import more vehicles which will help
enhance revenue to state coffers and boost economic growth,” Gunasekera
He said that currently the vehicle import sector operates on import
permits which do not augur well for the vehicle industry.
Vehicle import permits given to senior State sector employees could
be transferred and a permit holder could obtain a new one every three
The import duty on cars range from 200 to 350 percent. Buses are
exempted from import duty. The import duty on trucks has been increased
from seven percent to 125 percent and the duty on double cabs is 150
The sale of light trucks dropped by 75 percent from January to April
this year. The sale of light trucks during the first four months this
year was 1,646 units compared to 5,796 units last year - a 72 percent
decline. Sale of motor lorries slumped from 4,818 last year to 1,643
units this year, a 66 percent decline, motor cars from 15,262 to 5,974 -
a 61 percent decline, motor cycles from 85,889 to 53,320 units, a 38
percent decline, buses from 1,463 to 646 units, a 56 percent decline and
three wheelers from 36,904 units to 29,577 units this year - 20 percent
Vehicle importers said that the vehicle industry is facing a daunting
challenge due to the high import duty, weak exchange rate and high
According to a spokesman for the Department of Motor Traffic car
registrations dropped 26 percent to 21,884 during the first half of 2012
from 29,883 a year earlier.
Motor traders said that the price of smaller cars below 1000 cc has
increased due to the hike in import duty making it unaffordable to
middle income earners.