Sunday Observer Online


Sunday, 26 May 2013





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Government Gazette

'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.

Tilak Gunasekera

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 said.

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 years.

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 percent.

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 decline.

Vehicle importers said that the vehicle industry is facing a daunting challenge due to the high import duty, weak exchange rate and high interest rates.

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.


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