Sri Lanka new tax shock for non-electric cars

ECONOMYNEXT – Sri Lanka’s latest revision of taxes on cars has triggered price rises across the board, except for totally electric-powered smaller vehicles, but hardly any were cleared Tuesday, two days after the new rates kicked in.

After days of confusion about what is going up and what is coming down, official figures showed that petrol-driven small cars were also going up, with the exception of hybrid 660cc Suzuki cars.

"I have a Suzuki Stingray at the port, but customs have still not told me what the applicable duty is," an importer said.

According to figures released by Customs, the duty on a Nissan LEAF electric car will be down by about one million rupees, while duty on petrol-engine cars go up by about 37 per cent.

Finance Minister Ravi Karunanayake told reporters in Colombo that the new car taxes were aimed at discouraging imports "until the road network improved."

He said there were two reaons for the latest tax revision and that high rates will prevail for the foreseeable future.

The duty applicable on cars over 1,500 cc goes by more than double.

"Today, if you get your vehicle on the road, you spend hours stuck in traffic. Until we improve the road network, we need to discourage any further imports."

‘The second issue is the number of vehicles that has flooded our roads last year. About 90,100 cars were imported last year compared to 45,000 in 2014. We need to reduce imports and ensure revenue at the same time ."

The minister listed the following vehicles as having benefited from the new tax revision qualifying for a lower duty rate, but did not say by how much.





Toyota Vitz, Toyota Passo, Honda CRX, Honda Insight, Honda Jazz Shuttle, Honda Vezel, Honda Freed, Nissan LEAF, Nissan March, Suzuki Wagon R and Suzuki Stingray.

However, Customs officials said they were still working out the exact rates and it would take a few more days.

(COLOMBO, May 31, 2016)

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