Vehicle importers lament tax increase

4 April 2012 08:37 pm - 66     - {{hitsCtrl.values.hits}}

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‘Reconditioned vehicle’ importers yesterday lamented that they will have no option but to close down their business making one million employees redundant unless the government change its decision to impose taxes and other restrictions on motor vehicles.

Their main grievance was not the increase of taxes on vehicles but the reduction of the life span of vehicles permitted to import from two year old vehicles to one year for motor cars and to three and half years from five years for vans and SUVs.

As a result of the hike, a 1000 cc car would attract a total tax payment at the point of import at 200% as opposed to 120% earlier. Petrol- driven three-wheelers, would now be paying a total tax of 100% of the value against the previous 51%. According to the Treasury, vehicle imports have gone up from 3,421 units in 2009, to 37,134 units in 2010, and to 54,285 units in 2011.

However, the President of the  Vehicle Importers Association of Sri Lanka (VIASL) president Yoga Perera told the media yesterday that the biggest blow to the industry was the reduction of age of a motor car permitted to import to one year from two year and vans to three and half years from previous five years.

“The price of a family motor car will rise from a minimum Rs. 1.2 million to nearly Rs. 5 million according to their CC capacity which will be unaffordable for a middle class family. The members of VIASL will not be in a position to carry out their trade as usual under the circumstances. It is impossible for us to do buisness in this situation and one million employees attached to the industry will be at risk losing their employment,” Mr. Perera stressed. (Sandun A. Jayaskera)

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  Comments - 66

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  • Michael Ranasinghe Thursday, 05 April 2012 03:33 AM

    The Government cannot please every tom, dick and harry. Yoga Perera conveniently ignores the fact that there are many reconditioned vehicle importes who import sub standard vehicles which are somtimes condemned and they are totally assembled here and sold at absurd prices. In street language these are called "buded" vehicles. What steps has Yoga Perera taken to ensure that there are standards adopted by vehicle importers ?? Being a head of an association or union does not mean that these people are genuine. It is like Gemunu Wijeratne who does not take any steps to ensure that the standards of service in private buses are improved but at the drop of a hat initiates strikes. These people should be weeded out from scociety and the government should take the initiatives that they already have.

    Impartial Thursday, 05 April 2012 03:29 AM

    It so disheartning to note that the gourvenment does not care about the general public. To pay loans they scrape the public by taking away any chance of atleast owning a car. Is this the gourvenment that's running the country??? No change inspite of hearing cries from the children of the mother land.

    ind Thursday, 05 April 2012 10:45 AM

    Yes, they too could have. They were given time about 2 years. But the problem is that also used only by rich people. And as a result our roads got congested. There should be a control.

    upul Thursday, 05 April 2012 10:37 AM

    Sri Lanka governing policy is " EDA WELA TOURS"

    buffaloa citizen Thursday, 05 April 2012 03:36 AM

    Other than winning the war (thanks to SF and armed forces), this regime has not done anything absolutely useful for the country other than flaunt wastage and compromising the soveriegnity of the nation becoming puppets to China and Russia. This regime is even incompetant to introduce regulations after a careful study of all stake holders.

    ind Thursday, 05 April 2012 11:06 AM

    There's no space on the roads even to travel in a cart !!

    nimal Thursday, 05 April 2012 03:47 AM

    sorry 1 million people, they are lying.

    upul Thursday, 05 April 2012 10:56 AM

    Motor Mechanics, Auto Electricians, Tinkers, Sales workers,Service station people, Wharf Clerks, RMV Office, Customs, etc..

    Wimal_Modawansa Thursday, 05 April 2012 04:10 AM

    They can join the motor trafic department of Rajapakistan.

    Change the regime Thursday, 05 April 2012 03:52 AM

    feel sorry for the these investors, with no real increase in wages inflation steering up. How can middle class family buy vehicles which are almost double the price!

    sadarana kota Thursday, 05 April 2012 11:16 AM

    withh the tax revision a maruti 800 costs 1.78 million according to amw

    The galle of it Friday, 06 April 2012 06:09 PM

    Thie tax increases are because of the balance of payments.
    Therefore you should be building cars here, oh you are but the short sighted Government taxes them just as much so no incentive to buy.
    It doesnt care about providing local employment, infact it doesnt seem to care about its people.
    The arguement that their are too many cars is untrue, just no decent roads, Fuel imports ? then get electric cars
    How can a president whose son runs a Hummer & has gas guzzling SUV's talk about his people using less fuel, smacks of hypocrisy
    Lets see the Government practice what it preaches for once

    warren Sunday, 08 April 2012 12:36 PM

    What needs to be done?? What needs to be done is anything BUT what's being done right now.. You stupid inbred moron..

    Bakka Thursday, 05 April 2012 04:33 AM

    "one million employees going to loose their jobs"...my foot...just like how these vendors set their profit margins, there are so many vehicles on the roads that even a pedestrian can't cross the road, not to mention the numerous accidents. Since Sri lankans don't depreciate their vehicles, you close down your 'car sale' and open up a work shop, you'll have plenty of customers and provide more employment.

    warren Sunday, 08 April 2012 12:49 PM

    No.. actually what this country has far too many of is uneducated hooligans like you...

    Bimal Ranasinghe Thursday, 05 April 2012 04:55 AM

    Go for chinese cars traders! You will find better tax deal under any of treaty signed by MR with China and Hope this government would not mind excessive chinese cars on the road

    good doc Thursday, 05 April 2012 11:15 AM

    once upon a time they were doing lucrative business by importing cars, and they priced cars at higher levels, which normal people could not afford ! even for permit cars they were charging very high prices ! very unreasonable prices ! so, according Lord buddha's teaching they are suffering now !

    Fayad Thursday, 05 April 2012 04:57 AM

    This only the tip of the iceberg.

    garawi Thursday, 05 April 2012 04:29 AM

    I cannot understand this logic. A few days ago the president declared the Hambantota port is a DUTY FREE port.
    Noe there is a report saying that all vehicle imports will be directed to Hambantota.
    And another said the Vehicle tax is increased.
    Well my mind says that if imported to DUTY FREE port NO TAX should be charged.

    How do they think this is going to work! What am I missing here?

    dev Thursday, 05 April 2012 04:58 AM

    Ascharyaya...

    Singa Thursday, 05 April 2012 11:18 AM

    Nice Argument ! so the employee figure also questionable !

    Nodrog Thursday, 05 April 2012 05:05 AM

    Most are missing the point. We should be worried about the arbitrary overnight increases. This ruling may soon affect all imports. The cars are just the start.

    MOHAMED ASFAR Thursday, 05 April 2012 05:11 AM

    we have enough vehicles in sri lanka for 10 years.

    kondebendapucheena Thursday, 05 April 2012 05:23 AM

    since the reduction of tax these vehicle importers profited billions and kept going now they are crying for that,,,,,,,,,,
    3 Wheeler's should stop importing for a year,they are toooooooooooo much

    Leslie Thursday, 05 April 2012 05:31 AM

    You get loans and construct a harbour where you don't need one. When you find no one wants to anchor there, you declare it as a duty free port. Then too you find no takers. Now you compel all motor vehicles imported should be unloaded here.
    Is this how you develop the economy and take the country forward. My foot.

    Jo Saturday, 07 April 2012 01:07 PM

    You moron..... open your eyes.

    Kangaroo 2 Thursday, 05 April 2012 05:17 AM

    Hey fool its because of reckless driving not because of vehicles

    Another Thursday, 05 April 2012 11:45 AM

    Did somebody said walking is good for health?

    rosh Thursday, 05 April 2012 05:21 AM

    it might have been a duty PEE port then

    pushkara Thursday, 05 April 2012 05:40 AM

    becose you dont undustant vehicale tax and port duties.

    warra85 Thursday, 05 April 2012 05:43 AM

    this is a bloody joke. very soon a Maruti will cost 4 million.. equalant to $35k you can buy a brand new SUV in Australia. the gov is trying to blame the number of imports into the country. but the true fact is there is no FOREX in reserves. it is rediculous to pay 5 million rupees for a 2000 model recon family car. this shows that there in no value for the Rupee which is another problem.

    NonResident Thursday, 05 April 2012 05:43 AM

    I have no qualms if this duty structure is applicable across the board, with no duty concessions to anyone, otherwise this would a jackpot for the the Politicians who would already be negotiating to sell their permits.

    CYMA Thursday, 05 April 2012 06:14 AM

    Old cocks may be imported tax free for empty museum.

    sxhabeeb Thursday, 05 April 2012 06:16 AM

    earlier we were terrorised by tigerspf north who jump at once and kill. Now we have southern mosqitos who sing on your ears and suck your blood un to death..... Both ways we are sucked.

    Siri Thursday, 05 April 2012 06:21 AM

    PBJ and Nivudu are the best economist in the world.

    Wasantha Thursday, 05 April 2012 06:20 AM

    Soon after the New Regulations changed In the Year 2011 April a delegation came to Japan and we had a Vehicle Summit in Tokyo.Even during this ocassion We as Exporters made a request to the Delegation to ask Sri Lankan Government not to Change regulations like the way they do.At that time all Japanses Exporters had a huge stock of units bought on Orders and we had resell them with big losses.The same thing happened this time too.But thanks for our last Year experience we did not have big stocks in hand.But still we are going to loose by Re auctioning Ex stck units and probably LC opened but dealers who hesitate to bring down due to Huge Duty amounts they have to pay.Mr.Yoga Perera,you as athe President of Importers Association discuss these matters with respective authoroties in Colombo ?

    Jayasiri Friday, 06 April 2012 01:52 AM

    We need to go back to bullocks

    sltk2004 Thursday, 05 April 2012 06:38 AM

    Can they prove that there are 1 million employed in car sales ?

    Nodrog Thursday, 05 April 2012 06:25 AM

    If you did not want to pay the high profit margin you had all the liberty to import one yourself, no one forced you to buy from the dealer. Also, dealers are not responsible for accidents on the roads, thats the fault of the stupid people who buy their cars and the authorities for the state of the roads.

    Labby Thursday, 05 April 2012 06:27 AM

    This is not the first time that vehicle importers lamented that their employees will be out of job because of tax increases on imports. But in the end they always fell in line and it was the middle class user who bore the brunt, as always.

    truealf Thursday, 05 April 2012 06:53 AM

    It times to make made in SriLankan Vehicles. And give employment those who loosing the job by selling foreign CAR. One man being rich man always is not fare. Will give a change to be rich for new people and LK technology… Good Luck SriLanka.

    GameKolla Thursday, 05 April 2012 06:47 AM

    Yea right. So poor dont have a right to own a vehicle. Only you Colombo 7 bastards should go in vehicles. Others should go in buses in order to pave way for hamu mahaththaya's to go peacefully in roads.

    Anuruddha Thursday, 05 April 2012 06:46 AM

    Garawi..

    There is no tax free port in H'tota. That's a April fool's joke. IStory appeared in a paper on Apr 1st.

    They increase the taxes on 31st March and didnt reduce the taxes next day.

    bumiputhra Thursday, 05 April 2012 07:29 AM

    you can be finance minister in sri lanka. god bless us

    Old man Thursday, 05 April 2012 02:11 PM

    It's better to import only brand new cars. Then less pollution and less spare parts. I do not understand why vehicle importers are grumbling. There are excess of custom cleared import cars and this is the time for them to sell those cars and get more profits. If you are wise enough then do not keep big margins as you have already paid dues and taxes at the previous rates. So this is the time for you to make your fortune.

    milhan Thursday, 05 April 2012 02:31 PM

    poor people are the people who like this goverment..defeat of ltte was a team work..many involved..not only one man hero...

    sena Wednesday, 04 April 2012 10:04 PM

    another problem - most or the car buyers do not earn single dollar for the country and depend on garment workers and hose maids

    gamarala Thursday, 05 April 2012 03:35 PM

    if there are too many cars on the road, the solution is not to reduce imports but to improve infrastructure; better bigger roads. fancy lotus ponds and towers and vanity harbors and airports don't help anyone except the commission vultures.

    rich people in SL will NEVER use public transport voluntarily and for poor people the cost of going in the bus is going up everyday because of the utter waste of money on dead-end projects

    Pun Wednesday, 04 April 2012 11:02 PM

    There is no long term planning for his country. All people have to bear the cost of maintaining a moron who thinks he is king and his henchmen. When you see a motor parade with all high class vehicles, all paid by the poor people of this country, it is time to throw a stone or two to show how you exactly feel. Poor people will suffer for ever in this country. It is a curse to be a Sri Lankan ruled by nothing but selfish morons.

    mw Wednesday, 04 April 2012 11:28 PM

    First they reduced the tax, and now, they increase it. Haven't these folks (and the opposition too) head of a think called a policy? White papers? etc?
    idiots (not really, they take care of themselves very well - spending more than LKR7,500 per day, on some occasions)

    rajindra Wednesday, 04 April 2012 11:29 PM

    More to come, those who can afford to buy one, now go and get it cleared from Hambantota port. Kohomada Tikiri Mole.

    gajan99 Thursday, 05 April 2012 12:31 AM

    Yes, we do what need to be done. So, do your business or go some where else.

    sabs Thursday, 05 April 2012 12:40 AM

    there u go move on people this is how you put your hands up when the government goes wrong way. only the poor will go down not the richer. lets see what our Mr. President gonna do now.

    kiribath Thursday, 05 April 2012 01:20 AM

    From 1994 , all that they did was closing down, this is nothing new, Happy singhala new year,

    Lanka Thursday, 05 April 2012 01:20 AM

    This will reduce the vehicles on the roads!

    Ranjit W. Thursday, 05 April 2012 01:34 AM

    Good. The roads are already too congested and the government should keep a tighter control on imports of too many vehicles. It is time for the so-called rich people to use public transportation.

    Roger Thursday, 05 April 2012 01:32 AM

    Well Done MR

    ship Thursday, 05 April 2012 01:48 AM

    actually the total economy is in question mark. where all industries are in stake. so we dont know what will happen. and we dont know what this fools do on the coming days. there are more fools in the advicery board. we innocent people are trapped.

    Lankabay Thursday, 05 April 2012 02:22 AM

    The sudden increase in duty and the reduction in age limit has been made without prior notice to the importers. Even the vehicles that are already at Colombo port waiting for clearance have to be paid the new taxes. The regular importers already have stocks of vehicles ready for shipment to Sri Lanka. Those vehicles were purchased under the iunderstanding that the duty and the age limit will remain the same. Now that the age limit has been reduced most of those vehicles can not be imported to Sri Lanka, resulting in a death blow for most of them, as most of those vehicles intended for export to Sri Lana can only be resold well below the prices they were purchased at.
    When the changes are to be made, prior notice should be given to the importers and they should be gradual instead of sudden and drastic reduction. The present changes are undoubtedly a death blow for a majority of vehicle importers.

    fefe Thursday, 05 April 2012 01:54 AM

    1 milling employees?
    Sri lanka's population is 20 million and excluding school children and children under 18 years! we have about 15 million. So 1 in 15 is in recondition car import business?
    Really?

    Dalu Banda Thursday, 05 April 2012 02:25 AM

    one million employee? out 20 million population in this shabby business? how much the Garment Industry employed?

    Kuma Thursday, 05 April 2012 02:26 AM

    Lankawe car traders la kiyanne madyama pantiya huragena kana minie kakko(Crow) titak. Specially the second hand car traders. They somehow collect the cars from middle class sellers early in the morning offering ready cash to seller and in their sales they keep a huge margin. These second hand car sellers must be taxed heavily since they are doing a jara work and jacking up of second hand car prices. Reasently I checked in a car sale the same car they quoted for 13.50 just after tax revision quoting 15.50 for the same car(Hope they are taxex for the cars in car sales as well) ..(this was imported to country in 2007) .. Who is benefitted? Hora car sale karayo have benefited with government tax increase ... no one else. I request the government to bring some legislations on curb these. But the government never do so... Because politicians get money from these traders .....

    anura0903 Thursday, 05 April 2012 02:44 AM

    This is a step in the right direction.This country already has far too many vehicles and too few roads.

    Thomas Thursday, 05 April 2012 03:04 AM

    Permit vehicle imports for people & companies earning FOREIGN EXCHANGE. There are many owners of vehicles, who DO NOT PAY A CENT of taxex to Inland Revenue Dept. Link R M V to Inland Revenue Dept computer and tax all tax evaders.

    kakopappa Thursday, 05 April 2012 03:16 AM

    rise from 1.2 million to 5 million ?? God protect us!

    shantha madawela Thursday, 05 April 2012 03:28 AM

    we are going back to cart age...


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