Budget - Impact On Vehicle Prices

[rija]

2016 budget proposals have revised the taxation on vehicles. Below are extracts from the budget.

Unit Rate on Excise for Vehicles

556. Honourable Speaker, due to the reports on revenue leakages from the under valuation of

motor vehicles for tax purposes, a new valuation system was introduced recently taking full

option manufactures price as the tax base. To further strengthen this process of collecting

the duly payable taxes, I propose to introduce a simple unit rate of excise duty for the

vehicles on the basis of cubic centimeters. Duties on the percentage basis on certain vehicles

will also be revised.

Tax Incentives for Environment Friendly Vehicles

557. Government is taking measures to improve a cleaner environment in the country. For

encouraging the use of environment friendly vehicles with reduced emission, I propose to

reduce Excise duty to 2.5 percent for the vehicles which are run entirely on Solar, Hydrogen

or Helium.

Motor Vehicle Entitlement Certificate

558. Honourable Speaker, in the interim budget presented on 29 January, this year, I proposed to

introduce motor vehicles import registration license fee for importers who import motor

vehicles for business purposes. However, it being a uniform fee, large scale vehicle

importers would have gained an undue advantage from this measure. In view of this, instead

of the said license fee, I propose to introduce a vehicle import fee to obtain a Vehicle

Entitlement Certificate for each vehicle. This certificate will be issued by the Department of

Inland Revenue and the certificate will be necessary for opening of Letter of Credit for

importing a vehicle. I propose a Vehicle Entitlement Certificate fee of Rs. 2,000 per Motor

Cycle and Three Wheeler, Rs.15,000/- for a Motor Car and Rs.10,000/- per vehicle for all

other vehicles.

561. To earn foreign exchange as well as to reduce the used vehicle fleet in the country, I

propose to export such vehicles after being reconditioned. This will enhance the motor

mechanics related activities creating new employment opportunities as well. For every 20

vehicles exported by the same exporter under this scheme, a 50 percent tax credit will be

given for the importation of one motor car. Also, I encourage the private sector to seek

possibilities of importing used cars and export after reconditioning.

All the permits has also been cancelled.

Concessionary Permit Schemes

563. Honourable Speaker, the vehicle permit schemes have been politicized and misused and

have created a huge revenue loss over Rs. 40 billion a year to the government. I propose to

abolish all the vehicle permits granted under different schemes, including to

Parliamentarians. However, I ensure all government officers will be financially compensated

for the benefit foregone. Further, all the vehicles purchased to the Government will be

subject to all applicable taxes and necessary allocations will be provided in the budget.

What impact will have these on the vehicle prices ?

[KingSasanka]

Likely to go up.

[Mazda6]

Wait till next budget!

[gayantha789]

Vehicle Importers Association says price of imported vehicles will increase steeply after the implementation of 2016 Budget proposals.

Source:http://www.newsradio.lk/vehicle-importers-union-predicts-significant-increase-in-vehicle-prices/

Edited November 21, 2015 by gayantha789

[AbeysinghE]

It seems nobody can get the advantage of less FOB value as the budget proposals will increase the price again by the same margin. So the present prices likely to be remained unchanged or slightly up.

[udayanga_]

"Tax Incentives for Environment Friendly Vehicles

557. Government is taking measures to improve a cleaner environment in the country. For

encouraging the use of environment friendly vehicles with reduced emission, I propose to

reduce Excise duty to 2.5 percent for the vehicles which are run entirely on Solar, Hydrogen

or Helium."

What about electric vehicles ???
Hybrid also partially environment friends vehicle...
Finally is it true that vehicles price are going up???

[Magnum]

I didnt find anything regarding a increase in vehicle tax in the budget

[tcfern1]

They are going to introduce new excise duty

[asrock]

What about electric vehicles ???

Hybrid also partially environment friends vehicle...

Finally is it true that vehicles price are going up???

I heard the duty for Electric vehicles has been increased by 25%

[tiv]

http://www.treasury.gov.lk/images/depts/fpd/docs/gazetts/budget2016/1941_29E.pdf

Entire thing above,

For the newbie " budget ekata mokada wune bung! " types, please take your time and read away!

regarding EVs Page 18

8703.90.22 Driven by electric motors powered by on board accumulators/ batteries 50% - (revised duty)

charged by external electric source(e.g. National grid)

Edited November 21, 2015 by tiv

[Ginger]

2016 is some sensible budget compared to the budget history of Sri Lanka. One more thing needs to be done – institutional reforms to curb corruption. There is no country without political corruption. But other countries have strong legal structure to punish them. We all know how much rich, the politicians become, after entering parliament. Some are educated & most of them have failed their O/L. So for most of them, stealing has become the main source of income. Another important measure is to control the vehicle influx to Sri Lanka. This huge capital drainage will add value, if at least they are manufactured/assembled in the country or become re-export industry . It is basically a retail industry with huge hidden profits for few and huge capital outflow, widening the trade deficit, that affect the whole economy. So cancelling vehicle permit scheme is a good move. Sri Lanka has to start with a role model economy in all its totality. Singapore is the best accessible such model, not to copy but to innovate a framework based on positive characteristics. We have to remember 45% of the country population gets less than $2 daily income. To avert another social catastrophe, like in the past, the income distribution pattern needs some justification. On top of the above, the president predicted – “if to eradicate drug / illicit alcohol menace, they may have the capacity to topple a government”. Does it mean that the social intelligence level of the country, is taking a minus value ??. Fore the country male population to spend-free on drinking and for politicians - to steal free !!!!

Do they help each other to survive ???. Pretty merciful situation.

[Rumesh88]

Thank you tiv for the Gazette.

Quote

8703.90.31 Driven by electric motors powered by on board accumulators/ batteries charged solely by on board generated by on board solar electricity panels 2.5%

Unquote

Do they really exist except at concept level?

Edited November 21, 2015 by Rumesh88

[AluthEka]

From a gossip site..

http://www.hirunews.lk/sinhala/120610/%E0%B6%B8%E0%B7%9D%E0%B6%A7%E0%B6%BB%E0%B7%8A-%E0%B6%BB%E0%B6%AE-%E0%B6%B8%E0%B7%92%E0%B6%BD-%E0%B6%BD%E0%B6%9A%E0%B7%8A%E0%B7%82%E0%B6%BA%E0%B7%9A-%E0%B7%83%E0%B7%92%E0%B6%A7-%E0%B6%BD%E0%B6%9A%E0%B7%8A%E0%B7%82-25%E0%B6%9A%E0%B7%92%E0%B6%B1%E0%B7%8A-%E0%B7%80%E0%B7%90%E0%B6%A9%E0%B7%92%E0%B7%80%E0%B7%99%E0%B6%BA%E0%B7%92

[B2Spirit]

Aren't these tax rates da same as we have now for hybrids and ICEs ?

Is the VAT included/Excluded in this rate ?

Maybe it is the introduction of tax per engine CC that is driving the taxes higher.

On the brighter side no more permits and no special Import license.

Edited November 22, 2015 by B2Spirit

[rija]

Permits to government officers were given because they are underpaid. Some tax payers were given permits to encourage them. I do not think that there would be any effect in cancellation of permits to parliamentarians as they might have already imported all the vehicles they need.

[KingSasanka]

Yes it is true that the government servants are paid less but have they put a price on the FREE EDUCATION that they have received?

[rija]

Even though we say it is FREE EDUCATION it is not that free. On the other hand those who have properly educated with free education have already not wasted that money which is allocated to free education. That is why some of parents say " Moo haduwata wadaa hondai keeppa wassek hada gaththaanam". But all these are not excuses to put a price on free education. They should give proper service to the country while they should be paid adequately.

[KingSasanka]

Even though we say it is FREE EDUCATION it is not that free. On the other hand those who have properly educated with free education have already not wasted that money which is allocated to free education. That is why some of parents say " Moo haduwata wadaa hondai keeppa wassek hada gaththaanam". But all these are not excuses to put a price on free education. They should give proper service to the country while they should be paid adequately.

I do not want this turn to something political but I strongly believe that payment structure should be based on the countries "Per Capita Income" only.

[Magnum]

[asrock]

What about ICE cars 1500CC and above?

[luckey007]

Yes it is true that the government servants are paid less but have they put a price on the FREE EDUCATION that they have received?

But actually government servants are paying back. What about the people who are working for private companies and for other countries after taking the advantage of free education. And in Sri Lanka free education is given for all, not for selected category. And the professionals are the people who not wasted that money.

[trinity]

Thank you tiv for the Gazette.

Quote

8703.90.31 Driven by electric motors powered by on board accumulators/ batteries charged solely by on board generated by on board solar electricity panels 2.5%

Unquote

Do they really exist except at concept level?

I was thinking the same thing... Read about it here as well.

[Magnum]

What about ICE cars 1500CC and above?

I guess no change for gasoline cars, probably people would star buying Premio, Allion, Corolla, Carina now

But actually government servants are paying back. What about the people who are working for private companies and for other countries after taking the advantage of free education. And in Sri Lanka free education is given for all, not for selected category. And the professionals are the people who not wasted that money.

People who work fro private organisation do not take all the money home, they do pay tax

[priyanka]

Yes it is true that the government servants are paid less but have they put a price on the FREE EDUCATION that they have received?

Most of the private sector workers also got free education. Isn't it?

Country needs government servants

Just because they had the education free, you can't cut off their privileges

Doing so will collapse the system.

[priyanka]

Wrong post, sorry. !

Edited November 23, 2015 by priyanka