Sri Lanka mulls changes to electric car, carbon taxes
ECONOMYNEXT – Sri Lanka is open to amending carbon taxes and import duties on electric vehicles, ministers have said.
At a recent media briefing, reporters pointed out that electric cars now being imported start at around 110 kilowatts, whereas favourable import duties are for cars below 100 kilowatts.
"We will look into it and adjust it if so," Finance Minister Mangala Samaraweera said.
Sri Lanka imported a record number of electric cars in 2015, but taxes have been inconsistent since, discouraging private sector investment in infrastructure, such as charging points.
Samaraweera said the state is now negotiating with two private companies to develop infrastructure for electric vehicles.
"The future will be electric vehicles," he said.
The government has also announced plans to implement a carbon tax, with older vehicles getting hit with higher charges despite emissions testing.
The move has come under criticism, as poorer and older people tend to drive older cars, and use the vehicles less.
The carbon tax had also not discriminated between petrol and the more polluting diesel.
State Minister of Finance Eran Wickramaratne said the government would study suggestions made by critics.
"The emissions test is the minimum standard on whether a car should be on the road or not," he said in Sinhalese.
"After that, vehicles should be taxed based on how much it pollutes," he said.
"We will have to study this and implement the most liberal (lihil) process."
Carbon taxes are designed to hurt and change behaviour, going beyond revenue raising and directly going against the time-honoured taxation principle established in South Asia that levies should be charged as a bee might take nectar from a flower.
As a result, carbon taxes, pushed by the European green lobby to tilt the economic playing field in their favour, triggered yellow vest protests among motorists in France which is now threatening the entire government. (Colombo/Mar31/2019-SB)