ECONOMYNEXT – Sri Lanka has revised the domestic ‘value addition’ criteria of assembled vehicles following discussions with the industry and related state agencies, the state information office said.
In any country domestic assemblers import ‘completely knocked down’ vehicles, usually of an existing brand for sale in a protected market resulting in massive tax losses to the state, and collects the tax, engaging in tax arbitrage.
However the Treasury can recover part of the taxes through an excise tax.
The Ministry of Industries had submitted a new ‘Standard Operating Procedure’ with a ‘Local Value Addition Matrix’ to the cabinet of ministers.
The matrix had been developed with ‘government authorities and the consent of industrialists.”
The Cabinet had given approval. (Colombo/Jan16/2021)