Mini Budget Today 29Th January

[iRage]

No more depreciation now.. that's why the 100% column

true...but there are so many documents floating around. e.g. customs document that says FOB price is used for used cars (ie 100% of FOB), then another that says duty on 100% on value of a B/New car irrespective of age, purchase price, etc......so seems like it is too early for most people to know for certain what is going on and what ever is the actual policy it is adulterated with all the speculation. At the end of the day...I really don't care....cars have been unreasonably expensive for the last 25 years and it probably will be so for another 25 years unless people stop whining about *$#! import duty for cars and fix other things that the country really needs fixing. True as car lovers we would like to see nice cars coming in to the country and even get our hands on some; but we made do with what was there for the last 25 years and we probably will go on improvising with what we have until greener pastures for all do emerge.

[asrock]

Only thing hard to swallow in this hike is some of this will go into paying salary hikes of mostly unproductive govt employees which is unfortunate.

And the public sector is seriously bloated thanks to previous govt.

There are employees just sitting around in canteens and doing nothing.

And some of the offices are so overstaffed that new employees doesn't even have workstations.

Pouring money in to that type of environment is loss-loss for everybody.

Note : I am saying 'Most' not "All"

100% agree with you, most of government offices I have visited are like that. Some of them departmnts are building massive buildings to house 1000s of these useless government employees.

[CREATIVE]

With the hike I believe SL is also following other countries.

In those countries how hybrids are promoted is that hybrids are provided tax breaks or incentives so that they are made price competitive with non-hybrids.

Only thing hard to swallow in this hike is some of this will go into paying salary hikes of mostly unproductive govt employees which is unfortunate.

And the public sector is seriously bloated thanks to previous govt.

There are employees just sitting around in canteens and doing nothing.

And some of the offices are so overstaffed that new employees doesn't even have workstations.

Pouring money in to that type of environment is loss-loss for everybody.

Note : I am saying 'Most' not "All"

I doubt the tax revenue will increase from this tax hike... More taxes = less imports = less revenue for the government.. so basically these is a personal agenda behind this tax hike. Only Ravi and top level imports will know that.. If you know what I mean.. ;-)

[VVTi]

I am with Crosswind on this....there are a 101 other things we should be worrying about than car taxes (eg. what I hear and aid proposals I read about the education and health system from donors is quite sad).

I doubt if anyone else outside AL and EK is this concerned about the car prices and the taxes...

[The Don]

I doubt if anyone else outside AL and EK is this concerned about the car prices and the taxes...

Don't be unfair man. In SL new car prices have a habit of dragging the older car prices up. So anybody who has been saving up to buy a car will be interested. Because of the way it was dressed up some people might not have realised the implications.

Sadly it did not mention what will happen to vehicles for which LC is raised and they are on their way.

[asrock]

What happened to Free Internet and Wi-Fi hotspots?

[priyanka]

Sadly it did not mention what will happen to vehicles for which LC is raised and they are on their way.

they will have to pay according to the new rate.

[iRage]

I doubt if anyone else outside AL and EK is this concerned about the car prices and the taxes...

That is what I thought too....but from going to buy gas to look at floor tiles all I could hear was car prices going up !

[The Don]

they will have to pay according to the new rate.

Is that specifically mentioned? The usual policy before last time was, if LC was placed under the old tax regime they would be permitted to clear under the same regime. The last government broke with that tradition much to the dismay of many people.

[priyanka]

Is that specifically mentioned? The usual policy before last time was, if LC was placed under the old tax regime they would be permitted to clear under the same regime. The last government broke with that tradition much to the dismay of many people.

that is what my clearing agent told, he said the chances are less that the government will give some concession to the peoples who have opened LC already.

i myself have ordered an aqua .............. now in a trouble

[The Don]

that is what my clearing agent told, he said the chances are less that the government will give some concession to the peoples who have opened LC already.

i myself have ordered an aqua .............. now in a trouble

We shall wait and see

[vishkid]

While there are a lot of long term policy regarding vehicles that need to be thought out, for a short term objective this budget is not bad. Of course, there are conspiracy theories but I've seen them originate mainly from the people affected - i.e. independent importers. It's very hard to attach credibility to this, we'll just have to wait and see.

As per any loss of revenue, we must not forget that there is a certain amount of price in-elasticity with regard to many categories of vehicles. If the government did assume that there will be only a 30% drop in vehicle imports due to tax increases (that only in hybrids), they would still see >10% increment in tax revenues. You can do the calculation using the chart that was posted earlier. Plus they would have additional gains from under 1000cc category. So it's very hard to see how this policy is a loss to the government as some mentioned. Furthermore, if there is a 30% drop in demand at auctions, surely that will introduce a price benefit to the 70% who actually do import.

I would have been much happier if tax policy resulted in regulating the absolute number of vehicle inflow per year and also directly channeled that money to improving road and service infrastructure as well as city planning. We all understand that our roads (especially in Colombo) are inadequate to handle the amount of vehicles utilizing them.

[zeem35]

Hybrid tax should have remained unchanged. Hybrids were given concessions for their fuel economy.

Less fuel consumption less dependability on fuel import.

Again savings on cash outflow.

Edited January 31, 2015 by zeem35

[tcfern1]

I really appreciate the comments by crosswind

[VVTi]

Don't be unfair man. In SL new car prices have a habit of dragging the older car prices up. So anybody who has been saving up to buy a car will be interested. Because of the way it was dressed up some people might not have realised the implications.

Sadly it did not mention what will happen to vehicles for which LC is raised and they are on their way.

Ok Ok.. sorry sorry... INknow, car prices are a matter of life or death for some...

Edited January 31, 2015 by VVTi

[vishkid]

Hybrid tax should have remained unchanged. Hybrids were given concessions for their fuel economy.

Less fuel consumption less dependability on fuel import.

Again savings on cash outflow.

Like it or not, we are an import/export economy for most part (be it goods or services). Cash outflow isn't evil, it's a a necessity that has to be managed through trade balances.

If you're really worried about fuel expenditure, import less cars and increase mass transit.

Afaics, there's nothing in this budget that contributes to increasing national fuel import.

[asanka791]

Hybrid taxes are not finalized yet. most probably it will change after the meeting on monday. if you have already opened LC for a vehicle please join with us to get a relief

https://www.change.org/p/hon-ravi-karunanayake-please-exempt-the-new-hybrid-car-tax-scheme-from-individuals-who-have-opened-the-lc-before-the-29th-budget

And

https://#####/1526370294317396/1526413400979752/?comment_id=1526653237622435&notif_t=like

[Jor-el]

There was a rumour that issuing duty concessionary motor vehicle permits will be stopped, wonder if that is true

[zeem35]

Our mass transit is horrible. Other 3-4 million non hybrid cars consume more fuel. 141, ist, swift etc

[priyanka]

There was a rumour that issuing duty concessionary motor vehicle permits will be stopped, wonder if that is true

no official announcement as such yet................

[hasmax]

Hybrids may be good or bad from various points of view and I guess we had much detailed conversations regarding that. One may call hybrid seekers "thel hingannas" and many more and on the other hand those "thel hingannas" may have 1000 fair reasons from their side to do so. Hybrid or non hybrid must be purely an autonomous decision of the buyer himself and I don't think anyone should take that as superior or inferioir to other ones.

However we all must agree that as a consequence of popularity for hybrids helps a lot to bring down the overblown prices of used crappy vehicles in Sri Lanka to some extent. For instance we had seen 20 years old diesel 110s going for 2.4M sometime back but hardly sold for 1.6M very recently. So the vehicle prices were moving towards a stage where it should be gradually due to hybrids which might have beena major blow to the group of people who used to earn money by selling the vehicles which deserved demolition to super higher prices.

On the other hand small scale vehicle importers emerged as a big threat for the car dealers' mafia who used to have gross benefits by car business. I think many of you know how the so called reputed mega car sales selling manipulated vehicles while having their own repair shops at the back yard producing glittering vehicles out of R grade and accidented ones they imported to me kept on front yard still keeping a big profit margin. Since small importers were giving away the vehicles with a small profit margin, they were becoming the determinig factor for the final price of the vehicle, which was a so hated to see thing for godfathers of car business.

These might be the contributory reasons for the massive increment of hybrid taxes and new regulations about vehicle import probably influenced by the vicious minds of Car importers association who were loosing the lion's share of market and that may have long term negative cosequences at both individual and state level.

Anyway other than that the budget provided practical benefits and relief to majority of the people spaecially who are in need and that should be respected.

[aamarakoon]

Hybrids may be good or bad from various points of view and I guess we had much detailed conversations regarding that. One may call hybrid seekers "thel hingannas" and many more and on the other hand those "thel hingannas" may have 1000 fair reasons from their side to do so. Hybrid or non hybrid must be purely an autonomous decision of the buyer himself and I don't think anyone should take that as superior or inferioir to other ones.

However we all must agree that as a consequence of popularity for hybrids helps a lot to bring down the overblown prices of used crappy vehicles in Sri Lanka to some extent. For instance we had seen 20 years old diesel 110s going for 2.4M sometime back but hardly sold for 1.6M very recently. So the vehicle prices were moving towards a stage where it should be gradually due to hybrids which might have beena major blow to the group of people who used to earn money by selling the vehicles which deserved demolition to super higher prices.

On the other hand small scale vehicle importers emerged as a big threat for the car dealers' mafia who used to have gross benefits by car business. I think many of you know how the so called reputed mega car sales selling manipulated vehicles while having their own repair shops at the back yard producing glittering vehicles out of R grade and accidented ones they imported to me kept on front yard still keeping a big profit margin. Since small importers were giving away the vehicles with a small profit margin, they were becoming the determinig factor for the final price of the vehicle, which was a so hated to see thing for godfathers of car business.

These might be the contributory reasons for the massive increment of hybrid taxes and new regulations about vehicle import probably influenced by the vicious minds of Car importers association who were loosing the lion's share of market and that may have long term negative cosequences at both individual and state level.

Anyway other than that the budget provided practical benefits and relief to majority of the people spaecially who are in need and that should be respected.

Exactly!

[kush]

Hybrid prices will not increase by the amount of duty increase, already overpriced auction prices have crashed in Japan expect Rs. 300-400k reduction in CIF

[Dinukap4]

so I hear 'hybrid karyonge pu*a rathwela' everywhere I go.

[Crosswind]

<blockquote class='ipsBlockquote'data-author="zeem35" data-cid="271126" data-time="1422725496"><p>

Our mass transit is horrible. Other 3-4 million non hybrid cars consume more fuel. 141, ist, swift etc</p></blockquote>

Certain fiats and marutis do better than fuel than hybrids. If environment and fuel economy is ur concern, go buy one of those.

Edited February 1, 2015 by Crosswind