Vehicale Tax To Come Down Further

[kaushama]

It is predictable! Prices are going to go up and up!

Latest news that I have heard goes like this. Since there is a recent upsurge of the market created by our traders in Japanese market, speculating a possible tax increase, currency reserves go out of country unnecessarily. For example a 3.9 Axio we spend 4.5-4.5 mil now. A portion of this going out to Japan for nothing. Government probably won't lift the tax reduction. But artificial market trend drain reserves without a reason.

So this infamous official made this comment to offset these trends it seems. There probably won't be a tax reduction but it will remain same. Probably they will bring down another 3% or something. So he said " what nonsense we are not raising it again. we probably reduce it literally" That make sense! Negative propaganda for panic creators.

This was my exact point. Why do people make a sudden rush and panic in the market, unless they want to make quick bucks. By doing so they do serious damage in the foreign market and to Sri LANKAN economy too.

Edited August 27, 2010 by kaushama

[kaushama]

And that particular Rupavahini news item is quite goood negative propagande against, what they call " Vahana mafia" !!!! Just watch it guys!

[harshansenadhir]

currency reserves go out of country unnecessarily. For example a 3.9 Axio we spend 4.5-4.5 mil now. A portion of this going out to Japan for nothing. Government probably won't lift the tax reduction. But artificial market trend drain reserves without a reason.

This is what the logical reason to say that taxes won't further lifted and it might slap in again. You're spot on.

[MasterDon]

This is getting so boring now

LOL...yeah.

It makes me miss the trolls...sylvi sir and DKG!...where are you????

[harshansenadhir]

LOL...yeah.

It makes me miss the trolls...sylvi sir and DKG!...where are you????

Got to ask from Peri, whether had he sent a white van to pick 'em up..

[Watchman]

Got to ask from Peri, whether had he sent a white van to pick 'em up..

For all we know uncle mistook it for a chinese van and started to take it apart and fitting japanese parts into it.

[YALA]

LOL...yeah.

It makes me miss the trolls...sylvi sir and DKG!...where are you????

be careful wut you wish for machan you never know when it comes true..

on a serious note... i dont see a business rationale for our buyers at auctions to increase the price purposly since that benefit would go the auction house. it would be more to do with the demand in SL and the unfavourable exchange rate movement

[harshansenadhir]

For all we know uncle mistook it for a chinese van and started to take it apart and fitting japanese parts into it.

LOL , see mentioning of that name alone can cause a thread to go OT! MasterDon is to be blamed

[Watchman]

LOL , see mentioning of that name alone can cause a thread to go OT! MasterDon is to be blamed

Sylvi syndrome is easy to catch and hard to get rid of you know

[dilku]

For all we know uncle mistook it for a chinese van and started to take it apart and fitting japanese parts into it.

Nice daydream,Wake up it is tea time here.

[harshansenadhir]

Sylvi syndrome is easy to catch and hard to get rid of you know

talk about it, now it's high time to get back to P.B's statement which shattered some people. However, majority is saying, if this so called 50% tax cut hadn't done any significant impact on vehicle prices, what good a statement would do on that. Simply govt. is trying to tackle high prices and discourage the rush in imports.

[harshansenadhir]

Nice daydream,Wake up it is tea time here.

OT, reminds me of the famous song "Kanthoruwa Kanthoruwa mama wada karana..." :D

[Sifaan]

talk about it, now it's high time to get back to P.B's statement which shattered some people. However, majority is saying, if this so called 50% tax cut hadn't done any significant impact on vehicle prices, what good a statement would do on that.

If we want to get analytical about the impact of tax cuts, we need to be clear that the 50% cut in taxes applied only to petrol cars with <1000cc engines. For bigger vehicles - like corollas, allions, etc - due to classification the tax cut was ~30% (can't remember the exact numbers).

if the full benefit of the reduction was to be passed on, then it would result in ~30% price drop in brand new cars <1000cc, or ~20% for bigger cars

(for those who want to know how the numbers translate, the discount as a ratio = 1 - (100 + new tax rate) / (100 + old tax rate). multiply by 100 to get percentage)

of course importers of brand new cars are not obliged to pass on the full benefit... i.e. in past few years they were making much less margins on cars and now it's reasonable that they increase their margins a bit. But allowing for that, I think the prices advertised (e.g. by Honda in HitAds) for brand new cars did show that kind of discount.

however, brand new cars are still unaffordable to most people and/or they perceive a better deal with recons, so the recon market is bigger than brand new. there is more opportunity for price manipulation in that market (auction prices going up; that you can't really compare prices because no 2 cars even of the same model are exactly the same; no transparency in pricing, etc) plus huge demand from buyers so the price is artificially high. as long as people continue to buy at that price, prices will remain high

speculation that govt. will raise taxes again is helping to keep the market up (IMHO this is rumour created by car dealers to keep prices high) and so I think PBJ's response was the best in the circumstances, and if people stop panicking then prices can come down.

Edited August 28, 2010 by Sifaan

[kaushama]

speculation that govt. will raise taxes again is helping to keep the market up (IMHO this is rumour created by car dealers to keep prices high) and so I think PBJ's response was the best in the circumstances, and if people stop panicking then prices can come down.

+1

[jami]

i told this earlier, but most of them laughs at it......... tax will further reduce.

one thing dont buy TOYOTA for money.........

buy BMW, VOLVO, OR china vehicles.......... these vehicles are more cheap now concerning with TOYOTA

[heavyD]

i told this earlier, but most of them laughs at it......... tax will further reduce.

one thing dont buy TOYOTA for money.........

buy BMW, VOLVO, OR china vehicles.......... these vehicles are more cheap now concerning with TOYOTA

That's the first time I ever heard someone say NOT to buy a Toyota!

[SeanD]

That's the first time I ever heard someone say NOT to buy a Toyota!

http://www.winknightsmoney.net/columns/car...y-a-toyota.html

[esdeez]

i told this earlier, but most of them laughs at it......... tax will further reduce.

one thing dont buy TOYOTA for money.........

buy BMW, VOLVO, OR china vehicles.......... these vehicles are more cheap now concerning with TOYOTA

Thats ok, I was gonna buy a toyota with cattle... not money...

But yeah, as long as people want the toyotas, the prices will stay high. But theres no convincing the general public that there are other ALTERNATIVES to the niss-toy-onda range....

Actually, thinking about it, could be a good thing for those in the know....

[Pericles]

Got to ask from Peri, whether had he sent a white van to pick 'em up..

You'll need to ask the boss...

Edited August 27, 2010 by Pericles

[xXx]

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).

Dude you have answered your own question. What you think (a single person) doesn’t matter. It is what the masses think that counts. Rumor or not, manipulation or not the mindset among most are that the taxes will be increased. So everyone wants a piece of the pie before prices go even higher.

There's no price manipulation in Japan. All that is happening is local (sri lankan) importers are out bidding each other to get hold of cars in good condition. What has happened is a price war. Japs have not increased prices. It is due to the intense competition among importers that has driven the prices higher. If you ask a japanies individual who works at an auction or an export company i'm sure he's clueless on the expected/rumored future tax hikes in SL.

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.

As i have said earlier, biggest reason for price increase is due to the demand in SL not the currency devaluation. But my point is that too play a key role. Increase of JPY 250k dosen’t translates in to an increase of LKR 250k. It is much higher. Unfortunately that amount needs to be recovered from the buyer. It is this increase that you are witnessing in the market these days.

Economic theories very well apply to the local market. But what you have failed to grasp is that inorder for those theories to function certain variables needs to be static. Unfortunately these variables are constantly fluctuating in SL hence for the not so trained eye it may seems like the rules are not in effect.

On a slightly different note, due to the latest chit-chat in the market about a possible tax cut, most of the importers have halted/delayed their future shipments. So unless someone set these stories straight we may see a drop in supply and i'm sure you boys can figure out what'll happen next.

[ransam]

After the tax reduction the second hand vehicle prices has not come down at all. Assume GOSL is to increase the tax to what it was earlier. These jokers will increase the car prices by may be about 250k to 300k by saying taxes has gone up. LOL

[hyacc]

What's the tax category for these vehicles? Vans or Cars?

http://www.picknbuy24.com/detail/TOYOTA/NO...772.html?k=list

http://www.picknbuy24.com/detail/NISSAN/LA...483.html?k=list

http://www.picknbuy24.com/detail/MAZDA/PRE...803.html?k=list

Thanks

[kaushama]

On a slightly different note, due to the latest chit-chat in the market about a possible tax cut, most of the importers have halted/delayed their future shipments. So unless someone set these stories straight we may see a drop in supply and i'm sure you boys can figure out what'll happen next.

Yeah it is going to go up and up no matter what. We people are helpless. I did not say Japs have manipulated the prices. Our traders did it. And Japs get a bit of it too unknowingly. Hence currency drain. So PBJ and government is trying to offset that unnecessary currency drain. Recent price hike happened well after the yen rate has gone up. There was sudden rush in the market because of a scare of a tax hike. I am sure ordinary people like us; who are not economists, have not invented the story. Besides the so called budget they fear is so many months away. PBJ and the lot knows what is going on. That is why they target Sri lankan VAHANA MAFIA ( These are not my words! State media) for the turbulence in the market. The effect had to be neutralized by government. Rupavahini news item speaks volumes about that. Otherwise there is no need of a statement and a news item like that. There may be variables you talked about too. But if you see ads here Axio X type is being advertised now for 4.4 mil!!! They were 3.5 or 3.6. Mil Numbers certainly do not add. I wonder who created this rush within two weeks after Japanese holidays.

No point arguing here. I honestly know how people manipulate these things. I have personally witnessed those. No matter what any benefit meant for common people reaches them after politicos and middleman consumed their portion in a big way.

Unfortunately these variables are constantly fluctuating in SL hence for the not so trained eye it may seems like the rules are not in effect.

And I am talking about one of those variables which we hate! No matter what that variable will play the biggest part in the market. I am sure we all can include that variable to western economy theories with national pride.

In short after yen value increase and Japanese holidays, our people created an unnecessary rush. Hence increase in price. It is true Japanese prices had gone high too. But disproportionately. What do they gain? They raised the price to a new level. Benefit? In couple of weeks Japanese market will settle down again. Do you ever think our dealers reduce the price accordingly??? Impossible! Prices will stay high, even Jap market settles again. Budget is so far away and people will rush to buy cars before tax increase. How many people follow the Japanese auction prices? They just buy from these gentlemen who provides us a great service. I am happy government is trying to offset it this way.

Edited August 28, 2010 by kaushama

[defendertdi]

What's the tax category for these vehicles? Vans or Cars?

http://www.picknbuy24.com/detail/TOYOTA/NO...772.html?k=list

http://www.picknbuy24.com/detail/NISSAN/LA...483.html?k=list

http://www.picknbuy24.com/detail/MAZDA/PRE...803.html?k=list

Thanks

Toyota Noah comes under car category...duty will be some what equal to Toyota Allion Car duty......

[isurujosh]

Yeah it is going to go up and up no matter what. We people are helpless. I did not say Japs have manipulated the prices. Our traders did it. And Japs get a bit of it too unknowingly. Hence currency drain. So PBJ and government is trying to offset that unnecessary currency drain. Recent price hike happened well after the yen rate has gone up. There was sudden rush in the market because of a scare of a tax hike. I am sure ordinary people like us; who are not economists, have not invented the story. Besides the so called budget they fear is so many months away. PBJ and the lot knows what is going on. That is why they target Sri lankan VAHANA MAFIA ( These are not my words! State media) for the turbulence in the market. The effect had to be neutralized by government. Rupavahini news item speaks volumes about that. Otherwise there is no need of a statement and a news item like that. There may be variables you talked about too. But if you see ads here Axio X type is being advertised now for 4.4 mil!!! They were 3.5 or 3.6. Mil Numbers certainly do not add. I wonder who created this rush within two weeks after Japanese holidays.

No point arguing here. I honestly know how people manipulate these things. I have personally witnessed those. No matter what any benefit meant for common people reaches them after politicos and middleman consumed their portion in a big way.

And I am talking about one of those variables which we hate! No matter what that variable will play the biggest part in the market. I am sure we all can include that variable to western economy theories with national pride.

In short after yen value increase and Japanese holidays, our people created an unnecessary rush. Hence increase in price. It is true Japanese prices had gone high too. But disproportionately. What do they gain? They raised the price to a new level. Benefit? In couple of weeks Japanese market will settle down again. Do you ever think our dealers reduce the price accordingly??? Impossible! Prices will stay high, even Jap market settles again. Budget is so far away and people will rush to buy cars before tax increase. How many people follow the Japanese auction prices? They just buy from these gentlemen who provides us a great service. I am happy government is trying to offset it this way.

after being an observer and a party involved with buying it self. i have to agree with you to some degree on the market manipulation theory. some big seller put up an advertisement in famous papers and web sites with a very high price for a certain car and then even the small timers increase prices in greed. market manipulation is definitely around although not as pronounced as one might think. it is up to buyers to use their brains and not be in a hurry when making purchasing decisions. in this current market the difference between a good decision and a bad rushed one can be 500k to even millions!