Vehicale Tax To Come Down Further

[Ripper]

This just came in

http://www.adaderana.lk/news.php?nid=9531

these guys have rehashed the lbo article nothing new there...

[hyacc]

It's true. Sorry I didn't seet it before.

[Watchman]

Yes... but isn't this the same guy who gave an undertaking to courts to never hold public office again?

+1

I was going to say the SAME thing when kaushama kept putting him on a pedestal, but you beat me to it. Do you think PBJ in 6 months will say "Dear Sri Lanka, I promised tax cuts toyou all, but i'm sorry I couldnt deliver. I hold myself accountable and remove myself from this office and vow never to rake on such responsibilities in the future".. oh wait, he did that already, but now he's back again .

What if after 'saying' all this he doesnt actually give you your expected tax-cut? Are you all going to take a newspaper-clipping to the customs office when you try to clear your car.

At the same time some of you said as soon as the last tax cut came "dont buy now.. prices will go lower".. they didnt.. and for those of you who DID wait, you were probably hit by a good 200-300k if not more...

My point in general is, dont give false hope to people who might need to buy a car. And for those buyers if you need to buy a car, see what fits your current budget, and just buy it.

[kaushama]

+1

I was going to say the SAME thing when kaushama kept putting him on a pedestal, but you beat me to it. Do you think PBJ in 6 months will say "Dear Sri Lanka, I promised tax cuts toyou all, but i'm sorry I couldnt deliver. I hold myself accountable and remove myself from this office and vow never to rake on such responsibilities in the future".. oh wait, he did that already, but now he's back again .

What if after 'saying' all this he doesnt actually give you your expected tax-cut? Are you all going to take a newspaper-clipping to the customs office when you try to clear your car.

At the same time some of you said as soon as the last tax cut came "dont buy now.. prices will go lower".. they didnt.. and for those of you who DID wait, you were probably hit by a good 200-300k if not more...

My point in general is, dont give false hope to people who might need to buy a car. And for those buyers if you need to buy a car, see what fits your current budget, and just buy it.

Well He may not do it. But the point I wanted to make is different. I do not want to praise him or have high hopes on their sayings. But when the "official" view is at least, there is going to be another reduction, how can car sale guys say that prices are going to be high soon due to forthcoming tax increase? If market follows trends like in stock market, car prices should come down by at least 1 or 2k with these news. They are no better than these politicos perhaps even worse. When there is a definite tax reduction of the car imports still there is no reduction. Why? Sri Lankan Government? Japanese government?

If they are going to remove tax reduction in next budget few months ahead, why do dealers increase the price now itself? Is it Japanese making money because they spy on Sri lankan govenment on the tax policy???

To me politicos are corrupt. But these manipulators are in the same class or above.

[kaushama]

My point in general is, dont give false hope to people who might need to buy a car. And for those buyers if you need to buy a car, see what fits your current budget, and just buy it.

I quite agree on this. There is no hope in this car market even there is going to be another huge tax reduction. Middleman will find some way to rob your money. So buy soon unless you can find a car yourself in a rural japanese auction place. Otherwise you may get assaulted in Tokyo by your own country men.

[harshansenadhir]

I quite agree on this. There is no hope in this car market even there is going to be another huge tax reduction. Middleman will find some way to rob your money. So buy soon unless you can find a car yourself in a rural japanese auction place. Otherwise you may get assaulted in Tokyo by your own country men.

you perfectly understood how things work in Sri Lanka. Predictions, forecastings are highly inaccurate, things can change upside down overnight.

[seeker]

Are you all going to take a newspaper-clipping to the customs office when you try to clear your car

[zeem35]

Is it true ?? sold my car yesterday and hoping to get a new one soon.

[esdeez]

This is the problem in our country, speculation is always rife. When you think about it, its nothing more than glorified gossip: Just because you have a piece of news, irrelevant of its accuracy, you share it with all and hope to gain some popularity in the process, even if it is detrimental in the long run.

For example, if this turns out to be another dead end, the government will have (to an extent) reduced its earnings by giving the impression of a further cut, and therefore encouraging people to wait even longer before parting with their cash...

I'm not slagging off those hopeful for such a tax cut, as its solely the politicians duty to either a) Make an official statement, or B ) Keep things quiet. By just blaring out something, or whispering it to a friend, these politicians create more trouble for themselves when the public expect them to deliver on their statements....

Don't get me wrong, I'd love to see a further reduction, but I'm criticizing the state's way of dealing with it....

Edited August 26, 2010 by esdeez

[kaushama]

Don't get me wrong, I'd love to see a further reduction, but I'm criticizing the state's way of dealing with it....

State's way of handling things could be well understood if you recall the way they unanimously approved tax free vehicles for themselves in the first Parliament session. I think that had been the only bill passed unanimously without any opposing in the Parliament in recent years.

I do not know the exact reasoning behind the tax reduction. It may not well be for the benefit of the common man. Perhaps some hidden agenda, just to buy time with IMF. We expect this behavior from them. Damn them. But even when there is a tax reduction it is very difficult to enjoy the full benefit. Prices will somehow go up and people will find a way to increase prices. Otherwise there is not reason for dealers to increase the price within 2 or 3 weeks by few lakhs. All the logical reasoning is due for a price reduction or stabilty. Yet prices go up. Don't tell that this is due to yen rate. This is due to increase in prices of vehicles in Japan!!!???? Japanese people taking advantage of tax reduction and taking another calculated gain with the information by the secret service that taxes will be reinstated again to previous values. Suddenly Axio Gs are sold for 5 million! Allions for 6 mil! So hurry up! This is how our market behaves!

And I wish good luck for those, who are waiting for a crash in the secondhand car market.

Edited August 26, 2010 by kaushama

[chamilrajapakse]

If the government is already making enough money through the increased tax revenue, I don't see why they are thinking of a further reduction. May be they are being greedy and wanting to make more and more revenue from vehicle import tax.

What I am concerned is that whether this anticipated further reduction (if actually given) will eventually benefit the actual buyer. The car prices in Japan has already risen due to increased demand from Sri Lanka, Pakistan and etc. So with this news, I guess we will have more people holding onto there decision to buy a new car until the reduction is materialized. So eventually when they are ready to import a car, the prices of used cars in Japan may have gone up to sky heights thus not getting the benefit of the further tax reduction.

[Watchman]

Well He may not do it. But the point I wanted to make is different. I do not want to praise him or have high hopes on their sayings. But when the "official" view is at least, there is going to be another reduction, how can car sale guys say that prices are going to be high soon due to forthcoming tax increase? If market follows trends like in stock market, car prices should come down by at least 1 or 2k with these news.

Once again my point; The "official view" is NOT a clear representation of reality. If so I can only presume that Yunraj Singh who recently caught dengue in Sri Lanka was probably moonlighting in his sexy miniskirt around borella to make some extra cash

So no matter how high up the 'official' is you really can't take his word... sadly we're in a day and age where someone can make any statement and win some TV facetime. And PBJ's done just that... there wasnt even a timeline mentioned.. so he too is merely initiating rumors gossip himself....

Edited August 26, 2010 by Dilesh

[xXx]

And if this is true recent shout in the market that taxes going to be raised again, and hence the price hike; had been nothing but another market manipulation, by people who run the business. When it was first posted in the forum few months ago that taxes going to reduced, people laughed at us. But it was writen here with good evidence provided by top officials.

Despite all these market manipulation goes on. What I can not understand is, our people in Japan doing some severe damage by raising the prices there. That money definetely is going out of country. If people can get together and manipulate market, they should do better by giving the benifit to country and people so that they get more turn over in their business. But these people only have unidirectional thinking.

Care to elaborate your comment please???? Majority of cars imported by locals are purchased via auctions. Due to the over whelming demand in SL for unreg cars importers are outbidding each other on popular makes thus driving the prices hgiher. There's no close door conspiracy involved. Since you like to talk about financial markets, it is similar to a stock in high demand.

On your second comment on why doesn’t the vehicle prices go down because of a newspaper article like in the stock market. Well market reacts to a negative price of information because investors are willing to cut their losses and move on by selling their stakes. unfortunately this is not happening in the car market. How many of you including yourself is willing to sell your car bellow the market price because of PBJ's comments????????

About the economic reforms, this has been a hot topic for not years but decades now. It is not something Chinthanaya or PBJ came up with. Our tax structure (not just for automobiles) are very complicated and scattered. Plus the income tax net has way too many holes in it. For instance people who provide professional services can easily go under the radar and let’s not forget about the tax haven given to government servants. If this regime is really committed towards the reforms they should publish the framework of the new structure and a time frame. Due to the absence of this people have no option but to rely on speculations. Unfortunately when you take into account the actions of this regime (i.e. 2500 pay hike, executive PM etc) even though they make an official announcement there will be a degree of uncertainty.

All in all, if taxes are to come down that'll be good for the indsutry and the buyers. But it'll take a good few months for the revised taxes to come into effect due to the sheer volume of cars up for sale these days. If there's such a proposal in the next budget it won't come into effect till end of the 1st quarter of 2011 (budget needs to be approved from the parliament in the first place after three readings, plus it’ll take couple of months for the importers to adopt the new tax scheme)

[Rebel]

If market follows trends like in stock market, car prices should come down by at least 1 or 2k with these news.

Man do you keep track of the CSE?? Trends??? Get real!

The more you comment the less I understand what you're about. And about the Axio; can you tell me (as I really don't know) the price of an unregistered Corolla before the tax cut.

What I am concerned is that whether this anticipated further reduction (if actually given) will eventually benefit the actual buyer. The car prices in Japan has already risen due to increased demand from Sri Lanka, Pakistan and etc. So with this news, I guess we will have more people holding onto there decision to buy a new car until the reduction is materialized. So eventually when they are ready to import a car, the prices of used cars in Japan may have gone up to sky heights thus not getting the benefit of the further tax reduction.

With all due respect, I seriously think Pakistan must be looking for boats now and not cars

And could someone enlighten me on how big is SL's demand for 2nd hand vehicles in Japan? 1-5% or more?

[harshansenadhir]

And could someone enlighten me on how big is SL's demand for 2nd hand vehicles in Japan? 1-5% or more?

This was explained few times on this thread itself. Only to blame ourselves for being so conservative and limiting our interests in handful of Japanese makes/models out of all varieties available plus -3 year YOM range. Therefore, this demand is not for the entire 2nd hand vehicle market in Japan but a niche segment out of that.

[xXx]

This was explained few times on this thread itself. Only to blame ourselves for being so conservative and limiting our interests in handful of Japanese makes/models out of all varieties available plus -3 year YOM range. Therefore, this demand is not for the entire 2nd hand vehicle market in Japan but a niche segment out of that.

And for (what seems like) the 10th time i'm gona say Spot on.

And for people who are wondering why the prices has gone up by 2-4 laks, crunch some numbers and you will see for yourself.

For example

CIF value go up by say 250k Yen, in LKR it is almost 350k (FX rate 1.38).

Now for the wise asses who's gona say FX rate is 1.34 why are you using 1.38 for your calculation. 1.34 rate is what's called interbank rate. This is the rate banks buy/sell from/to each other. When an end user buy currency the rate is always slightly higher.

To make thing even mroe interesting if you add bank interest (assuming money used for the import was borrowed) for 3 months it comes clsoe to 20k.

See this is the problem you boys don't take into account these minor details that in the end add upto a good 100k+

[saraprobe]

If the government is already making enough money through the increased tax revenue, I don't see why they are thinking of a further reduction. May be they are being greedy and wanting to make more and more revenue from vehicle import tax.

What I am concerned is that whether this anticipated further reduction (if actually given) will eventually benefit the actual buyer. The car prices in Japan has already risen due to increased demand from Sri Lanka, Pakistan and etc. So with this news, I guess we will have more people holding onto there decision to buy a new car until the reduction is materialized. So eventually when they are ready to import a car, the prices of used cars in Japan may have gone up to sky heights thus not getting the benefit of the further tax reduction.

What is this crap, Japanese car exporters to Sri Lanka is mere basically nothing , Pakistan virtually bankrupt!

[kaushama]

And for (what seems like) the 10th time i'm gona say Spot on.

And for people who are wondering why the prices has gone up by 2-4 laks, crunch some numbers and you will see for yourself.

For example

CIF value go up by say 250k Yen, in LKR it is almost 350k (FX rate 1.38).

Now for the wise asses who's gona say FX rate is 1.34 why are you using 1.38 for your calculation. 1.34 rate is what's called interbank rate. This is the rate banks buy/sell from/to each other. When an end user buy currency the rate is always slightly higher.

To make thing even mroe interesting if you add bank interest (assuming money used for the import was borrowed) for 3 months it comes clsoe to 20k.

See this is the problem you boys don't take into account these minor details that in the end add upto a good 100k+

Thank you mate for your expert explanation. I am not an economist. I thought at least tax structure is going to be stable for another year or so by all the indications Gov is putting around. So in my simple knowledge about economy, shear volume of imports from Japan, prices should at least stabilize or should go down (In my dreams). But I can see a huge buzz in the local and Japanese market for imminent Tax hike in a very short time. Probably they all are not economists too. What they quote for their price increase; both here and in Japan, the news spreading that the tax is going to be increased soon. There may not be a conspiracy but if you have checked the vehicle prices two weeks ago the prices had been,

I checked with few who cleared their cars (personally imported) and the approximate prices they got are as follows. These vehicles were cleared about 2 weeks back.

Axio X grade white 2007- 3.3M+

Axio X grade Silver 2007 - 3.3M-

Axio G grade Beige 2007 - 3.6M+

Axio G Grade White 2008 - 3.8M-

But they say now the auction prices may be higher & hence price could be around 4M. I am taking Axios as an index, as it is the most popular choice perhaps.

If any of you found any comparative prices for unreg at car sales pl share the details.

I am taking this from another forum member's post in another thread. Those were the prices around as I checked three Weeks back. There was a holiday in Japan so there was no auctions for about one week. After the commencement of business this rumor of a taxes hike, is going around like a storm.

Now (after two weeks) Axio G white is 4.4 mil, Grey or maroon is 4.9 to 5 mil. All the traders including ones in Japan say that this is due to possible tax increase.

See this is the problem you boys don't take into account these minor details that in the end add upto a good 100k+

When they were asked a price break down, what they say is not the inflation due to Yen thingy, they say prices in japan is very much higher due to this tax story. My simple layman mind (With regards to economy) questions me all the time, why people are so keen on a news of a tax increase, when the news (whether they are bogus or not) is for a possible tax reduction or at least stability. To me numbers do not add up.

Perhaps for the Sri Lankan market economical laws from the twilight zone applies.

I do not have any problem with you guys, who are beating me up , unless you defend automobile dealers. I am not pro-government either. I hate the politics here whether it goes to generals or chinthakas. I know all about them more than most do.

I know that a simple statement by a infamous Gov official will not bring down the prices down here. But if prices go up within one week, due to a rumor saying about a tax hike, I would expect at least stability in the local market due to the facts around. But this is the Mystic world with black magic.

If someone see the volumes of vehicles imported around, simple economical theories should bring down the prices of vehicles both unregistered or used. That is no where to be seen. Instead we have price hikes.

We all learn what ever the theories from western world and apply them here. For example the scientific knowledge I gained from there, could not be applied here, as it is, because of local perceptions and beliefs sometimes. There is more to it.

My problem is I can not find a good FD1 in Japan, both persons I know there, is playing a cat and mouse game with me now. God knows why? I can not reason it out with my very simple logic.

[kaushama]

What is this crap, Japanese car exporters to Sri Lanka is mere basically nothing , Pakistan virtually bankrupt!

I just held my breath without telling this. But Huge market like Japan, is exclusively importing cars to Sri Lanka. So a simple tax increase here causes a whirlwind there. We are becoming a force in Asian economy!!!! Well done Chinthaka!

Check yourselves,

http://www.tradecarview.com/used_car/japan...p;pn=1&so=1

I have been checking it since this TAx reduction came through. I do not see a increase in prices propotionate to price increases here.

My simple logic always gives me headaches!

[chamilrajapakse]

What is this crap, Japanese car exporters to Sri Lanka is mere basically nothing , Pakistan virtually bankrupt!

Your comment demonstrates the common man perception on the subject. The reason is that Sri Lankan and Pakistan markets are concentrated on a small section of brands, models, YOM and etc in the Japanese car export market. Take Toyota AXIO for a example. There is a huge demand for AXIO 2007/2008 cars in Japan simply because there is a high demand from Sri Lanka and Pakistan.

You will not notice a similar increase in demand for other vehicles such as Nissan, Mazda etc.

[kaushama]

Oh we should check the price of an Axela now too. I am sure it would have gone up propotionately to Axio here. I am pretty sure of it. In fact I just hear they are now quoting 4 mil for one.

[chamilrajapakse]

Sri Lanka's used car market is never predictable...But one thing is sure...no matter how much is the tax reduction from the govt...the end user is not getting the same benefit...it is lost somewhere either in Jap auction or with the middle man...I don't know who is to blame...My personal opinion is as soon as you find a car that suit your budget...just go ahead and buy it before you loose the opportunity.

The Axio that was selling at around 3.5 mn about one month back is now going above 4 mn.

[Ripper]

Sri Lanka's used car market is never predictable...But one thing is sure...no matter how much is the tax reduction from the govt...the end user is not getting the same benefit...it is lost somewhere either in Jap auction or with the middle man...I don't know who is to blame...My personal opinion is as soon as you find a car that suit your budget...just go ahead and buy it before you loose the opportunity.

The Axio that was selling at around 3.5 mn about one month back is now going above 4 mn.

1+

[tallguy]

Link for yesterday rupawahini news. It seems like gov reduce tax agin

http://www.lankapuvath.lk/index.php?id=151...videodirectlink

[zerocool]

This is getting so boring now