Sri Lanka car registration up in July, tax not yet hit
Aug 31, 2018 14:03 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's motor car registrations grew 137 percent to 7,193 units in July 2018 despite a hike in taxes, as there was a large stock of smaller vehicles in the country, with total vehicle registrations up 7.47 percent to 42,043, an equities research house said.
Sri Lanka suddenly hiked taxes of a category of small hybrids, which people were buying because other cars were too expensive, due to problems with monetary management of the central bank.
Analysts have called for the reform of Sri Lanka's unstable soft-peg and permanent currency depreciation maintained by inconsistent policy which is disrupting business, peoples' lives and their aspirations.
"The impact of the recent increase in minimum duty rates will only be reflected in registrations towards the end of the year for there are large stocks of unregistered cars in the market and many more on the water that will not be taxed at the higher rates," JB Stockbrokers said in a note to clients.
The government allowed cars already ordered to come at the old tax in a bid not to disrupt the lives of citizens who had already planned and found funding for the vehicles, in an improvement from the casual disregard shown in earlier years.
Instead of fixing the unstable peg, Sri Lanka has started to rely more on disruptive administration measures such as credit controls using loan to ratio values, second guessing people's decisions and regressing to planning style measures, analysts have said.
In addition to small car owners, potential three wheeler owners were most badly hit.
While ordinary people are suffering state workers are getting tax slashed cars and the ruling class itself it is getting tax free cars.
Motor cycle registrations fell 6.2 percent to 28,662 units in July from a year earlier. Three wheelers were also down 6.3 percent to 1,675 units.
Suv and crossovers registrations were up 19.2 percent to 533 units in July. (Colombo/Aug31/2018)