Header Ad

Sri Lanka electric vehicle registrations soar to all time high in September; Leaf leads

ECONOMYNEXT – Sri Lanka’s new electric vehicle (EV) registrations hit a new high of 471 units in September 2015, up from just 15 units a year earlier, including a number of upmarket and super performance vehicles, an analysis of vehicle registry data shows.

Among the EVs registered in September were three BMW I3s, two Mercedes Benz B class vehicles and four super performance Tesla electric cars, an analysis of Sri Lanka’s vehicle registry data by JB Stockbrokers shows.

There are now eight high performance Tesla electric cars on the road.

The September high exceeds the 380 units registered in August. There are now 2072 electric cars in Sri Lanka, with Nissan Leaf, being the market leader with 2011 units.

Vehicle registrations in September reached an all-time high of as people rushed to buy vehicles ahead expected higher taxes in the budget.

Already several controls have been slapped on vehicles to discourage imports, as the Central Bank printed money and sent credit and excess demand soaring.

Tax Justice

Sri Lanka taxes electric cars – used by the richest sections of society – at around 5 percent, while small cars are hit with import duties, excise duties and also scooters which are now beginning to give mobility to less-affluent women are taxed at extraordinarily high rates.

Many electric cars are used a second car by richer people.

JB Stockbrokers said in a note to clients in May that Sri Lanka’s rates of tax for smaller vehicles, such as motor cycles and small cars, compared to larger hybrids and electrics violate tax justice.





JB Stockbrokers in a note to clients in May said taxes on electric cars were cut to 5 percent from an already low 28 percent.

Ironically however, spurred by demand from Sri Lanka, electric car prices had soared in auctions in Japan, making them around 800 rupees more expensive than before the tax cut.

Tariffs on motor cycle were 90 percent, three wheeler 95 percent, small cars 135 percent with a minimum 650 rupee tax, mid-sized cars 150 percent and hybrids 80 percent.

Feudal Privilege

Sri Lanka’s legislating elected ruling class, who make the tax laws pay not tax at all on cars, while they impose tax barriers for ordinary people who just buy a two-wheelers to raise their living standards.

The bureuacrats in the executive who collects taxes from the people, also get tax-slashed cars.

Electric cars are taxed at lower rates to ‘promote’ their use as the elected ruling class mis-use the tax system to impose their vicarious desires on the citizenry, alternatively penalizing them or incentivising them, critics say.

Tax laws – which should be a neutral source of revenue to run government services applied justly across the board allowing people to run their own lives as free citizens – was first mis-used for social engineering and discrimination originally in the West, undermining rule of law and generating perverse unintended consequences and perpetrating ‘legalized’ injustice.


Sri Lanka’s most vicious social engineering interventionist law to-date has perhaps been the so-called ‘Sinhala Only’ law which robbed the language freedoms of the citizens. Nationalist laws, which give political expression to latent tribal or religious chauvinism is the most deadly interventionism invented in Europe.

A proportionate tax (deliberately mis-labelled a flat tax by interventionists) generates more revenue for the government from people spending larger sums of money, establishing just rule of law, making it difficult for the ruling class to interfere in people’s lives.

Interventionist taxes including progressive taxation, undermine rule of law, mis-treating different classes of citizens and encouraging tax evasion, but regressive taxation is common and it is not only limited to cars.

The unequal taxes on vehicles, which hit the poorer people most is a telling demonstration of the perverse and negative consequences of interventionism.

High import duties in general has enriched a rent seeking producer class, that have built near-monopolies in building materials in particular, undermining people’s freedom to get shelter.

Political Intrusion

Freedom advocates say state interventionism, which is not just tolerated but also glorified and promoted by the urban intelligentsia has made ‘politics’ in the country the main pre-occupation and fascination of the people, who are either trying to circumvent interventions or seek rents.

As long as the urban intelligentsia believes in state interventionism by an all-knowing super intelligent bureaucracy as opposed to rule of law and freedom of the individual, citizens in general and the poor in particular will have to suffer, they say.

Electric cars have the benefit of pushing pollution away from congested city streets and focussing emissions at Sri Lanka’s coal burning power plants, which can dealt with at industrial scale.

Sri Lankan rulers also print money, with a central bank that is unrestrained by its own monetary law and then they try to manipulate real-economy imports like cars, gold, durables, which generate more distortions and ad hoc taxes, further insinuating politics and the state into peoples’ lives.

In the past rulers have rationed fuel, even foods, generated black markets with price controls, after printing money to create ‘foreign exchange shortages’ and high inflation.

If a central bank release liquidity or prints money, the currency will eventually fall unless it is defended with an equal volume of reserves.

To read more stories by our t(Colombo/Oct12/2015 – Update II)

Latest Comments

Your email address will not be published. Required fields are marked *