'Tax increase on hybrids, an unwise move'

By Lalin Fernandopulle

The Ceylon Motor Traders Association (CMTA) hailed the move by the government to slash the import duty on cars less than 1000CC which will enable more people to purchase cars, said CTMA Immediate Past President Tilak Gunasekera.

However, he said that the move to increase the tax from five percent to 30 percent on hybrid cars is not a sound move as hybrid cars are eco-friendly and saves fuel. The government hopes to reduce imports of hybrid cars and save the drain of foreign exchange. Hybrid cars account for around 90 percent of car imports."Though the intention is to save foreign currency, in the long-run the impact on the environment and waste of fuel will be enormous. Restricting the outflow of foreign currency is good," Gunasekera said.

He said by facilitating more imports of small cars with tax reduction there would be more money going out of the country making a dent on foreign reserves.

The increasing of the age limit for used buses from five to 10 years is not a sound move. The country will be a dump yard for old buses and it will also create more environment pollution.

At present there is no import duty on buses.

“If there is no duty on buses why should the government increase the age limit for used buses which is not safe for transportation," Gunasekera queried.

The import of buses increased 126 percent last year compared to the previous year.

The import of new buses increased from 1,582 units in 2013 to 3,576 units last year and reconditioned buses from 201 to 252 last year, a 25 percent increase.

Gunasekera said that there will be more used buses on the roads and imports of spare parts will increase as a result of the age limit being increased.

New motor car imports increased from 10,009 in 2013 to 10,679 last year, a seven percent increase. Reconditioned cars increased from 15,650 to 26,087 in 2014, a 67 percent increase. Dual purpose vehicles increased from 916 to 1,255 last year, a 37 percent increase.

However, import of new lorries dropped from 3,214 in 2013 to 2,038 last year, a 37 percent drop.

“The drop in the import of three-wheelers will help reduce road congestion and minimise pollution,” Gunasekera said.

Three-wheeler imports dropped from 82,254 in 2013 to 78,190 last year, a five percent drop. Overall vehicle imports recorded a 39 percent increase last year compared to the previous year.