Sri Lanka to lift block on tax-slashed car imports for state workers
ECONOMYNEXT – Sri Lanka will progressively lift restrictions on tax free imports of cars for state workers from June 01 and lift all restrictions by October 01, Finance Minister Mangala Samaraweera said.
Sri Lanka taxes imports of vehicles by ordinary citizens at rates over 200 percent but gives the elected ruling class tax free cars and state workers tax-slashed can in a Second and First Estate style privileges of France’s Ancien Régime with the rest dumped into a Third Estate of commoners.
Finance Minister Mangala Samaraweera from June 01, letters of credit could be opened on permites issued before September 30, 2018.
Permits issued before February 2019 will be allowed to open LCs in August.
After October all imports will be allowed.
Sri Lanka’s private credit turned negative in January after falling steadily from October amid a political crisis and capital flight.
Analysts have called for reforms to limit the room the central bank has to print money while also targeting an exchange rate peg with multiple convertibility undertakings.
Sri Lanka started having foreign exchange shortages ever since a currency board (floating interest rates) were abolished and a central bank was set up to control interest by printing money.