Petition Hybrid

[Crosswind]

There are revocable and irrevocable LCs. Generally irrevocable LCs are opened for importing vehicles. If the supplier's and purchaser's banks mutually agree, even an irrevocable LC can be revoked. I did that a few years ago. No penalties are involved.

[B2Spirit]

Personally I think the best thing to have is a stable economic policy. That way people can plan better and there is more stability.

Unfortunately this is something that will never happen in Sri Lanka.

We are a country who likes to impose indirect taxes on everybody whereas enforcing and streamlining income tax system is the way other countries do business.

Govt just loves to blame importing cars for foreign currency losses, BOP crisis's and everything under the sun that is wrong with this economy.

And they use it to score points/ earn easy revenue by raising/reducing taxes on vehicle imports arbitrarily.

To worsen the matters, complicated outdated tax structure based on engine capacity and fuel type helps to bring expensive cars at a less tax % than the common cars.

To put it in context it's like a income tax structure where a limited set of people earning 1 million is paying 25% tax while an average earner earning 1/3rd of that pays 40%

Edited February 12, 2015 by B2Spirit

[The Don]

Unfortunately this is something that will never happen in Sri Lanka.

We are a country who likes to impose indirect taxes on everybody whereas enforcing and streamlining income tax system is the way other countries do business.

Govt just loves to blame importing cars for foreign currency losses, BOP crisis's and everything under the sun that is wrong with this economy.

And they use it to score points/ earn easy revenue by raising/reducing taxes on vehicle imports arbitrarily.

To worsen the matters, complicated outdated tax structure based on engine capacity and fuel type helps to bring expensive cars at a less tax % than the common cars.

To put it in context it's like a income tax structure where a limited set of people earning 1 million is paying 25% tax while an average earner earning 1/3rd of that pays 40%

Yeah, a hall mark of not having a national economic policy. Normally such a a policy needs to be run for at least a couple of decades, before you start to see real benefits (take India and China for example, in India Manmohan Singh implemented reforms in the 90s and China has Den Xiao Ping to thank for their economic miracle).

We keep changing ours every year. The import taxes are only the tip of the ice berg. In the greater scheem of things its insignificant. But its the principle, that you cannot make any investment with reasonable certanity and you cannot develop a good investment model as a result. We are probably losing billions in investment for this reason.

You are correct in saying that we need to address issues around income tax as well, though I think the biggest issue there is the black (cash) economy and that a lot of people outside the PAYE system do not pay income tax at all.....