Sri Lanka vehicle tax revenues down in early 2016 after hike
ECONOMYNEXT – Excise tax revenues from vehicles fell 10.6 percent to 59.433 billion rupees in the first four months of 2016 from a year earlier, data from the finance ministry showed.
During the period motor vehicle imports had fallen 23 percent, with cars falling 43 percent, buses 52.7 percent and trishaws by 62.6 percent. Sri Lanka raised taxes of vehicles saying people do not deserve cars were buying them while other said it was to fix a balance of payments problem.
Sri Lanka has a strong Mercantilist false doctrine where there is a belief that fuel and car imports cause balance of payments trouble rather than money printing by the central bank. During the latest balance of payments crisis,
Mercantilists could not blame either fuel or even the overall trade deficit as the trade gap was also steady amid slower inflows coming through the financial account.
The International Monetary Fund has already told Sri Lanka not to engage is such useless tactics. (Colombo/July03/2016)