Special Permits For Tax Payers?

[Buddhika M H]

Hi guys,

I dont know whether this is true or not but sometime ago i remember there was a talk about giving permits for tax payers (with some conditions of course).

So what happened to it?

I was actually intrigued by some paper ad appered on a last weeks paper, that said something about "priviaged tax payers permit" or something.

If they are giving it what are the exact conditions and rules?

Thanks.

[nira74]

Hi guys,

I dont know whether this is true or not but sometime ago i remember there was a talk about giving permits for tax payers (with some conditions of course).

So what happened to it?

I was actually intrigued by some paper ad appered on a last weeks paper, that said something about "priviaged tax payers permit" or something.

If they are giving it what are the exact conditions and rules?

Thanks.

Taxpayers who have paid income tax of Rs.250,000 or more per annum for the last 5 years are entitled to a vehicle permit. However the regulations on the type of vehicle you are entitled to import are not clear.

[viking]

Hi,.. this is indeed a good gesture by the government to encourage people to pay taxes. However… I believe it’s not a fully fledged permit scheme as currently it is only limited to small cars. But this is the way to go as the entire state lives thanks to the tax payers and that is what enables to pay for the salaries of most other government people who have got concessions to import much larger vehicles including politicians. Anyways…. For the moment,…. unfortunately the tax payer is only privileged to import a small car for their tax contributions.

[Buddhika M H]

Wow! 250 000 is pretty high, it maybe a joke to give them a small car, nevertheless something is better than nothing

[Pericles]

I may be a pessimist for saying this, but somewhere down the line I expect someone to say that since tax-payers are getting permits, govt workers should be entitled to subsidies when getting their cars down. Shouldn't make mush difference since tax-payers paying govt salaries means they subsidize the cars they are getting down anyway.... Except it means the govt has even less in the treasury to do useful things with.

Oh, and BTW, this aint no party issue. Govt means whoever is in power. They all wanna come to power to do this sorta thing, so don't think this is party issue if you want to contradict.

[viking]

I may be a pessimist for saying this, but somewhere down the line I expect someone to say that since tax-payers are getting permits, govt workers should be entitled to subsidies when getting their cars down. Shouldn't make mush difference since tax-payers paying govt salaries means they subsidize the cars they are getting down anyway.... Except it means the govt has even less in the treasury to do useful things with.

Yes,.. you are absolutely correct my friend…. it’s a simple yet a powerful logic the administrators have not been able to see…. OR… may be did not want to see and will not want to see …. which is a clear indication of their intentions….. how sad it is to helplessly and hopelessly be part of a country that is run by administrators with such mentalities…..

[Supra_Natural]

Could someone please enlighten me a bit more on this permit scheme? anywhere we can get details about it for example?

[fuzzo]

does anyone have the exact details of this?

[Buddhika M H]

think there was a person in the forum who ordered a benz c180 / 200 for this permit scheme. cant remember his ID.

hope he'd shed some light.

But anyway think one should pay considerable amount of income tax to get this.

PS. its almost 3yrs, even i've forgot i started this kind of a thread

[madmax]

does anyone have the exact details of this?

My uncle got down 2010 Allion on this permit after the tax reduction. I think it was 25% off the import tax. About 500,000 in final price.

[DevakaC]

My uncle got down 2010 Allion on this permit after the tax reduction. I think it was 25% off the import tax. About 500,000 in final price.

Yes one Doctor we know used this scheme to get a permit. But to be paying 250,000 per year on Income taxes to the Inland Revenue what do you think would be their net taxable income for a financial year? Atleast above 3 million I suppose? I think its a great way to entice tax payers, but what I think the crooked does is forgo paying that 250k per year and save 1.25 million in 5 years compared to the 500k reduction they get on an allion.

[Sifaan]

But to be paying 250,000 per year on Income taxes to the Inland Revenue what do you think would be their net taxable income for a financial year? Atleast above 3 million I suppose?

To be quite precise, a monthly gross income of LKR 182905 (upto LKR 182924) is subject to PAYE tax of 20835, so an annual income of a shade under 2.2m would result in 250k PAYE taxes annually. But income taxes thresholds have changed over the years and it may be that 5 years to pay 250k as tax you might've had to have earned much more.

(the story is more complicated with lump some payments like bonuses)

but what I think the crooked does is forgo paying that 250k per year and save 1.25 million in 5 years compared to the 500k reduction they get on an allion.

If you are employed, it's quite a feat to evade taxes altogether because of PAYE; and maybe it's better to pay the tax and get a permit in 5 years (assuming the scheme is still going to be valid) than muck around with the package and maybe save 60k/year in taxes. (60k is an arbitrary number, but it's a ballpark figure for tweaking the pay package to reduce PAYE by 25%) - also that type of mucking about reduces the income that the bank will accept you are earning if you want to get a loan; plus companies having that kind of salary scale prefer to keep their books clean

of course if you are a businessman it's altogether a simpler proposition

[chris_abayasinghe]

To be quite precise, a monthly gross income of LKR 182905 (upto LKR 182924) is subject to PAYE tax of 20835, so an annual income of a shade under 2.2m would result in 250k PAYE taxes annually. But income taxes thresholds have changed over the years and it may be that 5 years to pay 250k as tax you might've had to have earned much more.

(the story is more complicated with lump some payments like bonuses)

So I guess my questions would be:

- Does a professional (not someone who is in business for themselves) really have a monthly gross income of between LKR 182905 and LKR 182924;

- And this might be OT but... how does someone afford to pay the monthly payment on a LKR 60 lakh Toyota Allion anyway?

Any insight would be helpful as it has been a REALLY long time since I lived back home...

Thanks!

Chris

[DevakaC]

To be quite precise, a monthly gross income of LKR 182905 (upto LKR 182924) is subject to PAYE tax of 20835, so an annual income of a shade under 2.2m would result in 250k PAYE taxes annually. But income taxes thresholds have changed over the years and it may be that 5 years to pay 250k as tax you might've had to have earned much more.

(the story is more complicated with lump some payments like bonuses)

If you are employed, it's quite a feat to evade taxes altogether because of PAYE; and maybe it's better to pay the tax and get a permit in 5 years (assuming the scheme is still going to be valid) than muck around with the package and maybe save 60k/year in taxes. (60k is an arbitrary number, but it's a ballpark figure for tweaking the pay package to reduce PAYE by 25%) - also that type of mucking about reduces the income that the bank will accept you are earning if you want to get a loan; plus companies having that kind of salary scale prefer to keep their books clean

of course if you are a businessman it's altogether a simpler proposition

I am assuming on your configurations you haven't considered the standard deduction of I think close to Rs. 300K that a tax paying individual is allowed to forgo on a given year. But all in all I think you made it quite clear of what range an individual must be earning a month or an annum to be considered for this permit. Not to forget this needs to be continued for 5 consecutive years to be eligible. And I agree on the values of maintaining a tax file.

Now this thread can continue for the likes of individuals who make the above mentioned figures. And for others like us, SOMEDAY!

[Sifaan]

I am assuming on your configurations you haven't considered the standard deduction of I think close to Rs. 300K that a tax paying individual is allowed to forgo on a given year.

I took the numbers from the 09/10 PAYE Tax Table, which already includes tax-free annual income allowance:

http://www.inlandrevenue.gov.lk/publications/TaxTables/paye0910/Table%201-%20Monthly%20Deductions.pdf

- Does a professional (not someone who is in business for themselves) really have a monthly gross income of between LKR 182905 and LKR 182924;

In table form it lists for monthly income of ~250k, which presumably means there are quite a number of people earning in those ranges (the reason for tables and not just formulas is that calculating from the table leads to less errors).

Also, one sense of the word "professional" are for people on professions like architect, doctor, lawyer, and even photographer and hairdresser. For such, it's quite easy to earn much more than this a month. e.g. a "name" wedding photographer will cost you Rs. 80~100k. Of course they have lot of expenses and tax for them would be calculated more as for a business (and it's also easier to hide income anyway)

[g-unit]

I have one of these permits and been wondering what to get. Now finally decided on a C Class 180 Kompressor sports (1.6L). Been asking a few guys who import on the rough duty on this car if I were to import it WO the permit but they seem very vague on a figure. Do any of you guys had the experience in importing this car? Any idea on the duty under the recent changes. Thanks guys.

[malla]

I have one of these permits and been wondering what to get. Now finally decided on a C Class 180 Kompressor sports (1.6L). Been asking a few guys who import on the rough duty on this car if I were to import it WO the permit but they seem very vague on a figure. Do any of you guys had the experience in importing this car? Any idea on the duty under the recent changes. Thanks guys.

I was almost about to get one thru D*MO. the car costs 10.5 millon and the for the permit you get 1 millon off but D*MO imposed to a 500,000 fee so really you get 500,000 off. Even if you get a car from an importer you need to pay the 500,000 to D*MO to register your vehicle. If your vehicle is not registered with them you cant even get a service done thru them. so either way you have to pay the 500,000.

D*mo does not bring the C180 down anymore for the permit cause the new C180 has the CGI not the kompressor.

the permit scheme has been stopped. no new permits will be given only the issued permits can be used. you should have paid 250,000 for 5 years to be entitled. the vehicle is transferable.

Check with D*MO cuz the last time i checked they said the 180 kompressor will discontinue from march. i think all kompreesor engines will be discontinued and replaced by the CGI

[g-unit]

i spoke with them as well. I don't think they're interested in catering to this particular permit. I'm going to get one down from the u.k. As in go there myself and look for a bargain :-) . Just need to find out the rough duty for this when its brought down wo a permit. A clearing guy said it's around 4-4.5 depending on the age and options. Anyone agree with this figure?

[malla]

i spoke with them as well. I don't think they're interested in catering to this particular permit. I'm going to get one down from the u.k. As in go there myself and look for a bargain :-) . Just need to find out the rough duty for this when its brought down wo a permit. A clearing guy said it's around 4-4.5 depending on the age and options. Anyone agree with this figure?

go to autotrader.co.uk

You can find whatever you want there... there were people selling 1yr to 2yr old C180's for about 8mn in SL... in the UK it will be about £20,000 to £23,000

Edited June 15, 2011 by malla