Sri Lanka Slaps More Tax On Cars To Cut Imports

[Velocity]

Feb 18, 2008 (AFP) - Sri Lanka has further raised taxes on cars to discourage imports and save foreign exchange, officials said Monday, pushing first-time buyers out of the market as economic woes worsen on the island.

The new tax, which adds 10-percent import duty on cars and vans, is to be rubber-stamped by parliament this month although customs authorities have been collecting it since January.

Ambulances, funeral hearses, buses and three-wheel vehicles are exempt from the higher tax.

"The additional revenue will go into a fund to develop regional infrastructure facilities," assistant director of customs, K. Premanath, told AFP.

Sri Lanka has no car manufacturing industry and imports mainly from Asia and Europe with duties ranging from 250 to 350 percent before the new tax.

The finance ministry said the hike is also to discourage imports and save foreign exchange.

The island's overall imports jumped 10.2 percent in 2007 to 11.30 billion dollars, the central bank said last week. Petroleum products accounted for nearly 60 percent of import costs.

Total vehicle registrations in 2007 was flat at 278,000, according to customs figures.

"We have seen a 25 to 30 percent drop in overall vehicle sales in the past year alone. The taxes makes it impossible for first time buyers to own a vehicle," said Ranjan de Silva of the Motor Traders Association.

The price of a second hand, four-year-old Toyota Corolla will reach 40,000 dollars, car dealers said.

"Right now, we can't dispose the stocks we have in hand let alone import new ones," said Berty Widanagamage, spokesman for the Used Vehicle Importers Association of Sri Lanka.

"Interest rates are over 20 percent, inflation is over 21 percent and even leasing companies are feeling the pinch. We are finding it very difficult to survive," he said.

Prices of essentials have soared as the government pours 1.5 billion dollars to fight Tamil Tiger ##### this year, up 20 percent from last year.

Electricity charges are set to go up by 135 percent from March, under a hike proposed by the state-run Ceylon Electricity Board monopoly.

http://www.lankabusinessonline.com/fullsto...p;SEARCH_TERM=7

[Arc Angel]

OMG!!!!

I don't know whether to be happy that my 10 yr old car will grow in value or to be misarable cos thats all i'm gonna be able to afford to drive for the rest of my life...

Edited February 19, 2008 by Arc Angel

[Supra_Natural]

fantastic.... ALL HAIL THE MAHINDA CHINTANAYA....

this'll ensure that he can get himself an armoured Rolls at the very least..... the rest of us are gonna have to drive around in bullock carts soon....

honestly though, it wouldnt matter so much if they cut duty on locally assembled cars or something but are the dipsh*ts even doing that?? of course not, wouldnt be able to line their pockets if everyone bought local cars.....

Edited February 19, 2008 by Supra_Natural

[ferrarif50]

SRI LANKA ..... a land like no other

[Ripper]

fantastic.... ALL HAIL THE MAHINDA CHINTANAYA....

this'll ensure that he can get himself an armoured Rolls at the very least..... the rest of us are gonna have to drive around in bullock carts soon....

honestly though, it wouldnt matter so much if they cut duty on locally assembled cars or something but are the dipsh*ts even doing that?? of course not, wouldnt be able to line their pockets if everyone bought local cars.....

sad that our leaders don't realize the long term damage these actions cause to our country

these sorta moves will ensure that aging vehicles will never be taken off the road and will continue to have the negative effects of holding onto aging technology

all this for the common man while the big shots have a ball of a time...

[Gummybr]

Guys dont worry about this paper article, I have checked with people concerned and they have said its the same thing that the SL Customs put in effect from 1st January. So no hike.

[SeanD]

Also isn't that thing about a 30% drop in vehicle imports rubbish? Im sure I saw a graph that showed vehicle imports continued to rise last year.

Edited February 19, 2008 by SeanD

[seeker]

these sorta moves will ensure that aging vehicles will never be taken off the road and will continue to have the negative effects of holding onto aging technology

Spot on mate....

[GTAm]

Another nail in our coffin. The goverment is dead broke. Hunting for another USD300 from foreign banks. Get ready to replace your high performance cars with TATA Nanos???

[The Don]

Another nail in our coffin. The goverment is dead broke. Hunting for another USD300 from foreign banks. Get ready to replace your high performance cars with TATA Nanos???

The real effect on War,

I was recently at a function at a temple over here where a lot of the Sinhalese Buddhist diaspora had gathered, and all were feeling very optimistic about the war, very supporting of the war effort, asserting that the LTTE should be militarily weakened before anything else could be done.

I of course listened to this with an element of shock and disbelief. Because,

A. This is the same rhetoric and justification I've heard since I was 10 years old

B. The lack of recognition that people will die their lives ruined and property will be destroyed on both sides

C. The lack of recognition of the price we have to achieve this elusive victory, the economic cost, the culture of violence this installs, the human price ...... perhaps its easy to talk about these things when you don't actually live there (I sensed a bit of hypocrisy in it all ...)

And to think this is just the beginning .........

I do not think slapping more duties on motor vehicles (which was already high to begin with) will conserve that much foreign currency because its nothing compared to the amount of foreign exchange we spend on essentials and funding the war effort ....

The sad thing the outbreak of war has coincided with a global rise in inflation with prices of essential commodities would rise irrespective and to think with people in the forum from mostly middle class backgrounds finding things so difficult, how the 20% of the population who live under the poverty line are coping .......

Edited February 19, 2008 by The Don

[Velocity]

The finance ministry said the hike is also to discourage imports and save foreign exchange.

Does not make sense - why the f**k do they give permits then ?????

[GTAm]

Well said Don. I could not put it better. It's amazing how many people are buying this story even after years and years of the same thing. I recently discovered that some of my close friends have also fallen prey to this pseudo optimism and they forget the human cost.

You're absolutely right this is just the beginning..... I can hear the air stewardess screaming "Brace Brace"!

[mazdaspeed]

Does not make sense - why the f**k do they give permits then ?????

good 1 and very true....

did u see this comment form one of the guys ..... I think I too can agree and put this add

" 2. kush Feb 19

Looking for a woman with a car permit. Widows considered. Age immaterial. "

[xXx]

IMO talking to expats about the Sri Lankan Economy and political situation is utter useless. Since they don’t live there they have no clue about the real situation. What pisses me off the most is how these jokers or should I say most of them in order to be politically correct compare our 3rd world nation to developed one’s they are residing at the moment.

[madmax]

No matter how much tax is lifted, people still keep buying cars! So the government keeps increasing more! It's a never ending cycle.....

For example weren't we talking that the new Landcruisers have already landed at 25Mil? And the Hummers...

Edited February 19, 2008 by madmax

[madmax]

Does not make sense - why the f**k do they give permits then ?????

To get the votes

[xXx]

No matter how much tax is lifted, people still keep buying cars! So the government keeps increasing more! It's a never ending cycle.....

For example weren't we talking that the new Landcruisers have already landed at 25Mil?

I have to disagree with you on that for a certain degree. Yes the people are buying the new Land Cruiser for 25mil that's only coz they can't get a Range Rover for that money. People are buying the newer models but of the same vehicle category/class.

For example I’m sure as a BMW fan you would have loved to own a M3 or a X5 but instead you have to settle for a Korean coz the price has sky rocketed.

This is just the beginning of the economic hardships the upper class Sri Lankans have to endure (lower and middle class has been squashed like bugs already). Give it a couple of more years like this new vehicle models will be as rare as spotting a UFO

[The Don]

IMO talking to expats about the Sri Lankan Economy and political situation is utter useless. Since they don’t live there they have no clue about the real situation. What pisses me off the most is how these jokers or should I say most of them in order to be politically correct compare our 3rd world nation to developed one’s they are residing at the moment.

Wasn't trying to speak to them, got dragged in as I was passing by Needless to say I didn't hang around there for too long, disappeared as swiftly as I arrived

[The Don]

I have to disagree with you on that for a certain degree. Yes the people are buying the new Land Cruiser for 25mil that's only coz they can't get a Range Rover for that money. People are buying the newer models but of the same vehicle category/class.

For example I’m sure as a BMW fan you would have loved to own a M3 or a X5 but instead you have to settle for a Korean coz the price has sky rocketed.

This is just the beginning of the economic hardships the upper class Sri Lankans have to endure (lower and middle class has been squashed like bugs already). Give it a couple of more years like this new vehicle models will be as rare as spotting a UFO

There is also another reason for this. At this present moment according to friends of mine who live in SL, people are leaving the country at a very rapid rate !

So if the upper class Sri Lankans find it difficult to afford the lives they will aspire to the most probable thing a lot of them might do is leave .......

Our country is bleeding money, skills and people at such an alarming rate and the real impact of this would become clear in a couple of years ....

[Pericles]

Our country is bleeding money, skills and people at such an alarming rate and the real impact of this would become clear in a couple of years ....

It's already clear when you look at the jokers representing us.

[madmax]

I have to disagree with you on that for a certain degree. Yes the people are buying the new Land Cruiser for 25mil that's only coz they can't get a Range Rover for that money. People are buying the newer models but of the same vehicle category/class.

But they still go and spend a whole load of money on the Landcruisers right? It doesn't matter to the government whether that money is spent on a Landcruiser or a Range rover, they get a bucketful of tax money anyways.

[xXx]

But they still go and spend a whole load of money on the Landcruisers right? It doesn't matter to the government whether that money is spent on a Landcruiser or a Range rover, they get a bucketful of tax money anyways.

true but i think we are missing the bigger picture. think about first time buyers or people hoping to make a transition form a van to a nice family car.

amount of tax generated from supper luxury vehicles is nothing compared to the amount collected from economical daily runners.