Vehicle Duty Increased In 2014 Budget

[ramithad]

There is a depreciation table revision from tomorrow morning. Motor cars vans and HYBRID CARS will be effected in this revision.

new depreciation table is attached in this post. vehicles more than one year old and less than two years would be 90%. earlier value was 70% and 75%. Duty portion of 2012 Toyota Aqua hybrid would be increased by 200,000 to 260,000. Final selling price also would be increased roughly by same amount. Increase of Honda Fit would be increased by 185,000-245,000. price increase of prius and insight would be more.

Depreciation Table for the Valuation of Used Motor Vehicles

Period of Use

Depreciated FOB value

More than 1 year and less than or equal 2 years 90%

More than 2 years and less than or equal 3 years 80%

More than 3 years and less than or equal 4 years 75%

More than 4 years and less than or equal 5 years 65%

More than 5 years and less than or equal 6 years 60%

More than 6 years and less than or equal 7 years 55%

More than 7 years and less than or equal 8 years 50%

More than 8 years and less than or equal 9 years 45%

More than 9 years and less than or equal 10 years 40%

More than 10 years 35%

This change will be effected from tomorrow

depriciationTable-eng.pdfFetching info...

[Komisiripala]

so this is a good thing when claiming insurance for a 1998 car, right? that means they have to pay me more for a certain part i have to replace, no?

[Clark's son]

  On 11/21/2013 at 5:31 PM, Komisiripala said:

so this is a good thing when claiming insurance for a 1998 car, right? that means they have to pay me more for a certain part i have to replace, no?

will that increase the insurance premium too?

[Sylvi]

Members,

Creator of Asia Wonderland regime is creating history all above some few members had mentioned.

Thinking will be in power fro few more decades.

Sylvi Wijesinghe.

[Komisiripala]

On leased cars yes I guess so

[Crosswind]

Insurance premium depends on market value. if the market value increases, then the insured value should increase and so would the insurance premium. Insurance claims too, depend on the value of the parts that need to be replaced, subject to a maximum limit.

If you insure your car for 5 million 3 months ago and if gets totaled, you will get a maximum of 5 million. Not 6 million even if the post-budget price of the car is that, unless you have increased the insured value.

[Gummybr]

  On 11/21/2013 at 5:31 PM, Komisiripala said:

so this is a good thing when claiming insurance for a 1998 car, right? that means they have to pay me more for a certain part i have to replace, no?

No machang, its actually the depreciated value for a used car import. Basically the second hand car importers will be hit, specially the hybrid importers.

Good thing they have come with HS Codes for Diesel Hybrids, so expect Jaguar and LR hybrids to come into the market. Same duty as for the petrol hybrids apply for them.

There might be slight differences in the excise duty, cant be certain as I don't have the old rates with me nor does the customs website.

[Crosswind]

Sri Lanka is the biggest market for cars used for less than 2 years in Japan. When the taxes change in Sri Lanka, auction prices in Japan decrease in parallel, due to reduced demand. So in reality, the on-the-road price for a used car will not increase by amounts that has been presented here.

However, this will not prevent the car sellers from quoting the changes in taxation to the customer and jacking up their prices and profit margins.

[Rumesh88]

  On 11/22/2013 at 4:37 AM, Crosswind said:

Insurance premium depends on market value. if the market value increases, then the insured value should increase and so would the insurance premium. Insurance claims too, depend on the value of the parts that need to be replaced, subject to a maximum limit.

If you insure your car for 5 million 3 months ago and if gets totaled, you will get a maximum of 5 million. Not 6 million even if the post-budget price of the car is that, unless you have increased the insured value.

Correct. Because, according to the Principle of Indemnity in insurance the amount of compensations is limited to the amount assured or the actual losses, whichever is less. Hence the insured should inform the insurer and make adjustments to the premium if so required should there be a change in the value insured.

[GTAm]

Saddening to see another tax hike when we already spend ridiculous money on vehicles.

[Airborne]

what about the spare parts?

[tilvin]

As per my opinion, this depreciation percent change may not have any change on deteriorating second hand market... . Because market price heavily depend on demand.... . Since demand goes down day by day due to bad economic situation of country, the only chances are to prices slash day by day.....

[Crosswind]

  On 11/22/2013 at 7:23 AM, Airborne said:

what about the spare parts?

The depreciation table applies for cars not spare parts!

[Magnum]

Used vehicle prices to go up

http://www.dailymirror.lk/news/39162-used-vehicle-prices-to-go-up.html

[Crosswind]

  On 11/22/2013 at 11:54 AM, Magnum said:

Used vehicle prices to go up

http://www.dailymirror.lk/news/39162-used-vehicle-prices-to-go-up.html

ah... the car sales guys are already at it!

[Hoonigan]

Apart from the revision of the Depreciation table, are there any additions to the duties/taxes?

[Reckless]

afaik only the depreciation table has been revised. No additional duties/taxes.

[GTAm]

I have heard that excise duty has gone up by 6%. This is according to a clearing agent. I'm awaiting confirmation this week.

[C Perera]

Is this one of benifit, we receive due to CHOGM !!!!

[liya]

  On 11/25/2013 at 6:49 AM, C Perera said:

Is this one of benifit, we receive due to CHOGM !!!!

Now CHOOGOING for us

[Reckless]

Ceylon today article:

Used-car importers shocked by Budget 2014

[Charith H Jayasinghe]

  On 11/26/2013 at 5:31 AM, Reckless said:

Ceylon today article:

http://www.ceylontoday.lk/22-48499-news-detail-used-car-importers-shocked-by-budget-2014.html'>Used-car importers shocked by Budget 2014

So we can expect next tax reduction only with next election (Presidential) when they do fund raising (from car importers)

[chams]

According to the article not only the depreciation table but some other tax is also going to imply.

"According to him, the budget has not increased any tax on motor vehicles, but the President pronounced a change in the customs duty levying system on imported vehicles, creating a situation, where taxes used on reconditioned vehicles would be equal to a duty-levied brand-new vehicle."

so, does anyone knows how much increase? both Depreciation + other taxes

[sanjeevana]

How do we calculate duty of vehicle inline with depreciation table?

[Hoonigan]

  On 12/2/2013 at 10:12 AM, sanjeevana said:

How do we calculate duty of vehicle inline with depreciation table?

You calculate how long the import has been used, and take the depreciated value percentage according to the depreciation table and apply it to the the value of the car brand new (this is usually taken from the respective agent).

eg: if the dep table says 90% according to the age of the vehicle you're importing and the local agent gives 1mn as the brand new value, the taxable value will be 1mn x 90% = 900K

The value you arrive at is the base for which all the taxes/duties are applied to, which is dependant on the engine capacity of the vehicle (at least, there are other factors determining which taxes/duties are applicable if I'm not mistaken)