How Would The Market React To The 2015 Budget Proposals?

[tux]

Does this VAT change has any effect on personal imports?

I heard that when do personal imports, we do not need to pay VAT [1] ( not sure about the correctness ) and if VAT is absorbed into excise duty, that will not possible.

[1] http://www.autoeshop.com/private_imports.html

Edited October 27, 2014 by tux

[Willy]

How are the new budget 2015 going to reflect on car prizes

[Seeker LK]

How are the new budget 2015 going to reflect on car prizes

How many times this question has been asked in AL within last couple of days

Here some links

http://www.adaderana.lk/bizenglish/exclusive-sri-lankas-vehicle-importers-head-explains-reduction-in-vehicle-prices/

http://www.adaderana.lk/bizenglish/breaking-news-sri-lankas-car-van-prices-tumble-through-budget-2015/

[kanchanap]

From what i know hybrid tax will come down for small cars will be 50% from current 60%.

Vezel should come down by Rs. 300k

Will let know by tom on the exact figure.

It will be one tax replacing VAT, NBT,

Cess, Customs Duty and Ports and Airport Development Levy (PAL).

Extracts is below

Excise (Special Provisions) Duty will be charged in lieu of VAT, NBT,

Cess, Customs Duty and Ports and Airport Development Levy (PAL) on

certain articles specified under Chapter 87 of the Customs Tariff Guide;

New XID is 50% for Hybrids 8703.22.51...

So

old Tax = 60%

New Tax = 50%* (115/100) = 57.5%

[kanchanap]

Marginal reduction, around 25-30k

This Should come down by ~Rs. 75,000 ( Will vary based on conversion rate )

[kanchanap]

At the point of import there was 12% VAT charged. this VAT can be claimed by Leasing Companies, thus if you go for a 100% leasing, the leasing company would claim the respective input VAT and the lease value would be only the amount excluding VAT. When you pay lease installments,; Leasing company would charge you VAT on installment, which is called Output VAT. by the time you fully repay your lease, you would have ended up paying VAT on the value of the vehicle and on the interest payments made so far.

Now the VAT on import point in fully removed & replaced with Excess Duty, which means there won't be no VAT claimable by leasing companies when doing a leasing. thus the lease value will be inclusive of all the taxes. No changes made on the VAT on lease installments. Therefore, when you are to pay installment VAT will be charged.

Given that you get a vehicle lease of same value, your new installment will be at least higher by 11%

Thanks Tinyman..

Does This mean Leasing companies will offer same installment rates for unregistered vehicles, same as registered vehicles? and also there won't be 'vat invoices' issuing here after?

Is it that VAT is claimed by 'Inland revenue department' one time now, at the time of paying (single)XID when clearing the vehicle from ports?

[kush]

It will be one tax replacing VAT, NBT,

Cess, Customs Duty and Ports and Airport Development Levy (PAL).

Extracts is below

Excise (Special Provisions) Duty will be charged in lieu of VAT, NBT,

Cess, Customs Duty and Ports and Airport Development Levy (PAL) on

certain articles specified under Chapter 87 of the Customs Tariff Guide;

New XID is 50% for Hybrids 8703.22.51...

So

old Tax = 60%

New Tax = 50%* (115/100) = 57.5%

Official figure for Honda Vezel, new without depriciation Rs. 1.7 Mn.

Approximatly Rs. 75-100k less than previous

[Seeker LK]

Ok looks like after that wave of honda fits our roads seem set to be flooded with another surge of Viva Elites and Maruti's and a plethora of vans. Pretty soon we wont have the roads to drive our price-reduced econo-boxes and I guess we will all take the train like our grandparents used to do.

I think the point is, if public transport is more efficient then most people would take train / bus. But Sri Lankan public transport is terrible and pathetic.

[Luckyj]

yes. Ideally this what should have happen. But our countries public transpiration system is horrible. Government is also virtually doing nothing to improve it as well. Feel extremely sorry about the daily commuters to Colombo, using public transportation. Buses will consume minimum 1 1/2 - 2 hours to reach Colombo, even from close areas like Maharagama, Piliyandala, Moratuwa, Malabe, Kadawatha, Ja-Ela. Trains are faster but there aren't enough trains in the system. People packed like "Pol Patawala" in trains.

[tinyman]

Thanks Tinyman..

Does This mean Leasing companies will offer same installment rates for unregistered vehicles, same as registered vehicles? and also there won't be 'vat invoices' issuing here after?

Is it that VAT is claimed by 'Inland revenue department' one time now, at the time of paying (single)XID when clearing the vehicle from ports?

yes, there won't be any VAT invoices when you purchase a vehicle. the lease installment between registered & unregistered vehicles will be the same in future.

[Rumesh88]

Does this VAT change has any effect on personal imports?

I heard that when do personal imports, we do not need to pay VAT [1] ( not sure about the correctness ) and if VAT is absorbed into excise duty, that will not possible.

[1] http://www.autoeshop.com/private_imports.html

Even if you are a personal importer you needed to pay VAT under a temporary VAT number given to you.

yes. Ideally this what should have happen. But our countries public transpiration system is horrible. Government is also virtually doing nothing to improve it as well. Feel extremely sorry about the daily commuters to Colombo, using public transportation. Buses will consume minimum 1 1/2 - 2 hours to reach Colombo, even from close areas like Maharagama, Piliyandala, Moratuwa, Malabe, Kadawatha, Ja-Ela. Trains are faster but there aren't enough trains in the system. People packed like "Pol Patawala" in trains.

Absolutely right! In fact I am dreaming of a day when I would travel daily to office in a convenient public transport and confine the use my car only for leisure travel (Hope I did not sound like MLK Jr ).

[B2Spirit]

New XID is 50% for Hybrids 8703.22.51...

So

old Tax = 60%

New Tax = 50%* (115/100) = 57.5%

How did you arrive at the 115 figure ?

[matroska]

yes. Ideally this what should have happen. But our countries public transpiration system is horrible. Government is also virtually doing nothing to improve it as well. Feel extremely sorry about the daily commuters to Colombo, using public transportation. Buses will consume minimum 1 1/2 - 2 hours to reach Colombo, even from close areas like Maharagama, Piliyandala, Moratuwa, Malabe, Kadawatha, Ja-Ela. Trains are faster but there aren't enough trains in the system. People packed like "Pol Patawala" in trains.

true. Buses are just useless... its not just the excessive traffic but buses 'kotanawa' to get more passengers in. But there is an insane amount of trafic in Colombo( as well as the suburbs you mentioned above) and parking problems. This is getting worse by the day as more and more cars hit the road. I was surprised by the number of vehicles, traffic and the lack of parking space even in outstation towns.

The time we spend on the road is time that should have been used to read something or do something worthwhile. An acqaintance of mine, a director of a company who is an avid reader takes the train instead of driving to work because it gives him time to read.

[Watchman]

I dont know why everyone is bunching their panties over tax. It's not something you can foresee or control. Just let it sink in that tax has changed see what money you have, see what you can afford and pull the trigger.

There are greater problems in this country to be sad about about, and more joyful things/people to in our lives to be happy about. I can't afford to buy a decent car based on my income (without going into debt), and things wont change anytime soon. So I've let that reality sink in, and I'm a happier person now.

<< flies away singing kumbayaa>>

[RAZOR]

did any of you add permit vehicle prices to the equation. government says they have reduced some percentage from the standard tax which is way higher than the permit vehicle tax. so in fact this tax reduction is mostly a numbers game which has no effect on mid to high end car prices. am i right?

[Hoonigan]

The Don said it. The merits of a flat out reduction of vehicle taxes is indeed a bit confusing. This being a mere election gundu to appease the middle class workers is the most probable scenario.

Nevertheless, if someone was thinking of importing one, they better hurry and do it while this window stays open. I doubt the government will keep this for long. Not to mention the congestion the flood of new imports will add to.

[Ralph]

Hope this will be helpful,

Thanks Don

Edited October 28, 2014 by Ralph

[The Don]

yes. Ideally this what should have happen. But our countries public transpiration system is horrible. Government is also virtually doing nothing to improve it as well. Feel extremely sorry about the daily commuters to Colombo, using public transportation. Buses will consume minimum 1 1/2 - 2 hours to reach Colombo, even from close areas like Maharagama, Piliyandala, Moratuwa, Malabe, Kadawatha, Ja-Ela. Trains are faster but there aren't enough trains in the system. People packed like "Pol Patawala" in trains.

Funny thing here is the government can earn much comission from buying extra trains and improving track. The problem is with our track is there is no redundancy, so to improve it you have to stop the service or do it in a series of overnight upgrades which might keep people up due to close proximity to houses.

There is also the issue of track side homes, which is politically toxic, but must be dealt with if we are to have more frequent faster trains as right now you have to slow to a crawl to avoid accidents.

This is one of the simplest solutions to ease congestion. Use existing track but have more frequent faster air conditioned trains and then connecting buses from stations and I'm sure many will opt for that option as opposed to waiting in traffic!

[The Don]

Hope this will be helpful,

Sorry guys attachments seems not coming properly .

If its an image, upload it to a system like image shack and then post the url

[Luckyj]

this country runs with big time hypocrites. this is the main reason why no matter what happen, still people suffer. From the top guy to ministers to parliamentarians, from business owners to CEO/MDs to GMs to normal office employees to clerks, and even the normal people in "gamme-gode-sidadhiye" are deeply submerged with big time hypocorism.

As I see, there are 02 types of hypocrites in this country.

1] born to rich families, received top notch education & all luxuries, and taught by their elders that "you are in the top caste. All others are below you. Maintain that"

2] born to poor families, faced tough situations in life, under many hardships climbed the ladder with government education and arrived top levels. They also murmur a mantra "no person should come to my level. I they have to come, they have to go severe hardships"

we don't need to look for super develop countries like Japan, Germany, Scandinavian 3.........but countries like Malaysia, Thailand. Its amazing to see how well the public transportation has developed in recent past. Ample buses & trains, well maintained, with full air-conditioned. As far as I see, transportation is way big issues for common man in Sri Lanka. Looking at the amount of resources wasted on unnecessary stuff, increasing number of busses & trains with good quality are not big concerns. On the other hand government is charging super taxes on vehicles. If tax levels are brought to decent levels many of these Indian shits including 3-wheelers will disappear, and many would be able to afford a decent Japanese vehicle.

[The Don]

All topics related to the car market and the 2015 budget will be merged to this thread.

[Seeker LK]

Found it on facebook shared by a friend. Hope it'll come in handy for the people here. Not sure how far this is true. Correct me if it's wrong.

[Magnum]

Toyota Hiace:
Before: 4mil tax

Now: 2.2mil-2.3mil

Total estimated cost(not selling price) 5.5mil-5.6mil

This is what i heard if im wrong please correct me

Edited October 28, 2014 by Magnum

[Watchman]

geez.. cant u use one of the exisiting threads to post this!

[Seeker LK]

geez.. cant u use one of the exisiting threads to post this!

Umm yeah may be I should have