Tuesday June 25, 2019

Sri Lanka sharply raises tax on small hybrid cars

Aug 01, 2018 11:44 AM GMT+0530 | 2 Comment(s)


ECONOMYNEXT -  Finance Minister Mangala Samaraweera Wednesday raised taxes on the hugely popular small Japanese hybrid cars that have become affordable after his November budget rationalised import duties.

With his policy reversal, Samaraweera slapped a minimum duty of 1.25 million rupees on any hybrid car with an engine capacity of less than 1,000 cubic centimetres. The measure means the previous duty of 825,000 rupees on a Suzuki Wagon R will now be 1.25 million, up 425,000 rupees.

The ministry also announced reducing the tax on non-hybrid  gasoline powered cars below 1,000 CC to a flat 1.5 million rupees from the previous tax of 1.75 million, but within hours it was reversed. Accordingly, taxes on non-hybrid gasoline 1 litre cars will remain unchanged.

However, the new tax system narrows the price difference between the popular 660cc Suzuki models and the 1,000 cc Toyota Vitz as well as Indian-made Alto K10.

The move also helps the smaller Indian car manufacturers who do not have a hybrid variant to offer the price-sensitive Sri Lankan market. The Indian Suzuki could not earlier compete with the better-made and lower priced comparable Japanese models.


The government’s tax change appears to have been influenced largely by the heavy outflow of foreign exchange to import small hybrid cars which have outpaced even the ubiquitous tuk-tuks three to one in recent months. (COLOMBO, Aug 1, 2018)



  1. sikka August 02, 12:03 PM

    Jack : Actually only affordable people are making their lives easy after buying a vehicle. All others are just suffering after buying a personal car. Most of the people pumping their money on a vehicle just to maintain their ego.

  2. Jack August 01, 06:07 AM

    The minister feels it should only the rich must drive cars and it is the same with education,housing and personal or family vehicle.What a shame but they all preach during election season.

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