Tax concession for vehicles despite detrimental effect to the economy ; Minister

Deputy Minister mentioned that there is no way of collecting defaulted embarkation tax. “This tax is usually charged with the air ticket. Therefore it is collected from airlines when passengers purchase their air tickets. It is the airlines which pay the embarkation tax to the government

By Yohan Perera and Ajith Siriwardana 

The Government has decided to expand the taxable value of vehicles despite the detrimental effect on the economy, Deputy Minister of Finance Harshana Sooriyaperuma told Parliament yesterday.  

“We have decided to increase the taxable value of petrol and diesel vehicles to Rs 5 million from the earlier level of Rs 3.5 million on the first category of vehicles. The value of the second category will be increased to Rs 5.5 million from Rs 4 million. We are aware that this decision will have a detrimental effect on the economy. However we are going ahead with it so that people will be able to purchase a vehicle at an affordable price,” the Deputy Minister said.  

The Deputy Minister also said the government further decided to extend the embarkation tax concession charged from foreigners who use Sri Lanka’s four international airports. “US dollars 60 which was charged from passengers using Bandaranaike International Airport, Mattala Airport, Palaly Airport Jaffna and Ratmalana Airport will be reduced to dollars 30 for one more year.. This decision was made following a request from the tourism sector,” he said.  

However the Deputy Minister mentioned that there is no way of collecting defaulted embarkation tax. “This tax is usually charged with the air ticket. Therefore it is collected from airlines when passengers purchase their air tickets. It is the airlines which pay the embarkation tax to the government. However there is no way of recovering the defaulted embarkation tax,” he said.