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Vehicle Import Taxes Reduced To 25% What Will This Do To The Market?


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Nov 23, 2010 (LBO) - Sri Lanka has made electric and hybrid cars duty free, while a cut in value added tax and higher rates of depreciation allowed for used cars in the 2011 budget will make both brand new and used vehicles cheaper, analysts said.

Sri Lanka cut the maximum rate of value added tax to 12 percent from 20 which will reduce the import tariffs paid on all cars, though some commercial vehicles were already on the lower duty.

President Mahinda Rajapaksa said electric and hybrid vehicles will be completely freed from excise duties and value added tax to promote environmental friendly vehicles.

Motor homes will also be made duty free, according to the budget document.

The depreciation tables used to calculate duty on used cars will also be increased which will reduce total levies paid, industry analysts said.

Sri Lanka allows cars up to three years old to be imported. Now three year old cars will be depreciated 60 percent compared to about 80 percent earlier, two year old cars will depreciated.

The budget speech said the depreciation tables will comply with World Trade Organization rules.

State and public sector workers will get duty free concessions for the import of cars.

Levies for the smallest cars are slightly over 80 percent, while mid sized cars attract rates over 100 percent.

Rulers and lawmakers get tax free cars.

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i just read the highlights its says "the 25% duty waiver to individuals is removed". im not sure wut duty waiver it is refering to though..

that's when you paid > 250k/year as income tax for 5 years, when you import a car you could get 25% duty waiver (on the entire tax amount)

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so hybrids are not duty free after all? they are only VAT and exise duty free....

those were the biggest components; some of the taxes actually applied on the excise duty (e.g. the 15% surcharge that used to apply before mid-year reduction was calculated on the excise duty amount) so getting rid of the excise duty may knock off a few others as well.

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from the what i heard in the budget speech there is reduction on the below

VAT from 20% to 12%

NBT - from 3% to 2%

Regional infrastructure development levy (RIDL) - from 5% to nil

Social responsibility levy (SRL) - from 2% to nil

All above taxes are applied on vehicles

so there will be a sizable reduction in vehicle prices after January 2011

me too heard tha VAT reduction is only for financial services

does any one have a definition to "Passenger vehicle" ? :blink:

transporting of at least 28 pax ;) (that's wht i heard bt i dont know how 3wheels fall into that cat)

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transporting of at least 28 pax ;) (that's wht i heard bt i dont know how 3wheels fall into that cat)

you haven't seen 28+ people in a 3-wheeler :P ?

but seriously, the concession for 3-wheelers is not connected to the reduction in tax on passenger vehicles...

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What tuk tuks are getting cheaper??? as if we need more of them. :huh: More pain and accidents guaranteed for sure! :unsure:

Has anyone noticed the front lights of the new tuk tuks? (the dual side one)

i HATE them... they're too high for me..

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you haven't seen 28+ people in a 3-wheeler :P ?

but seriously, the concession for 3-wheelers is not connected to the reduction in tax on passenger vehicles...

i have seen 8 ppl in a 3-wheeler but not 28+ <_<

why everybody talks with a doubt of budget points? when it will be disclosed briefly? :unsure:

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why everybody talks with a doubt of budget points? when it will be disclosed briefly? :unsure:

it is disclosed. there was an adaderana link with the entire budget speech by MR.

but there isn't a section titled "for autolanka users" so the information related to vehicles is in several places (revised depreciation tables, exemption of VAT on various classes of vehicles - tuk tuks in 1 place, electric/hybrid in another, etc.) and it's sometimes not clear for us non-economists

in theory it's also possible that some aspects may be changed as a result of debate in parliament, but that would be very unlikely :D

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All the brand new MAZDA 3, Corolla 141, Honda CIVIC prices will increase. No one will buy vehicles from them now.

Dude seriously, I have noticed the last couple of posts in this thread and what are you trying to say? All you say is the prices are going up again and again. I have read the whole budget thing yet but from what I have read around is there is a chance for the prices to come down due to VAT reduction and the new depreciation values. Besides if vans get cheaper people with old cars and a big family might upgrade to a van causing the used car prices to be reasonable. (I might be wrong)

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