Though applications for tax slashed vehicles were rushing in by the hundreds in the early days, officials say it has now reduced to a trickle, with only 12,000 having submitted papers so far.

Some officials have asked to buy re-conditioned (vehicles used abroad for less than three years and imported to Sri Lanka) Japanese cars instead of brand new ones, but the request had been turned down by authorities.

Meanwhile agents for popular Japanese brands like Toyota, Nissan and Mitsubishi are unable to bring down cars quickly enough, resulting in long waiting lists.

Ordinary Sri Lankan citizens outside the public service have to pay more than twice the price, paid by a state worker to acquire a car due to the high tax burden.

Public servants also get a tax free salary and pension in Sri Lanka, and 57 cents out of every tax rupee collected in the first five months of the year, went for their salaries.

Now authorities have asked all state-workers who applied for a tax-slashed car to open a tax file to be able to tax incomes outside their salaries.

Sri Lanka has a bloated public service into which tens of thousands of unemployed graduates were stuffed in recent years, as part of a vote-buying exercise.

But at senior levels government officials are underpaid, though they get other benefits such as low interest loans.

Officials say the inability of senior officials to put up half a million rupees to buy an Indian-made car shows that they have not been able to save enough money over the years.

Officials say that many state workers are not asking for a permit because they do not have money saved to pay for them, while others could also be reluctant to open a tax file.

Meanwhile doctors who applied to buy expensive sports utility vehicles have been asked to open tax files and regularize their income tax accounts for the past several years, after facing searching questions about how they were able to afford such as expensive vehicle.

Doctors are allowed to engage in private practice, an arduous task with long hours, but the business is mostly done in cash with little or no documentary trail.

The practice has allowed Sri Lanka to retain the best qualified doctors in the island, while most developing countries have seen doctors leaving for better prospects abroad.

About 300 persons, mostly doctors, have applied to buy Montero jeeps.

The ten million rupee vehicle can be bought for only 4.2 million rupees with the tax concessions, officials said.

Agents for Japanese cars are asking for six months to deliver a car with units already in showrooms not being eligible, as taxes on the cars have already been paid.

Associated Motorways said state workers had ordered 350 vehicles so far while 250 are for Japanese vehicles and the rest are for Indian made Maruti cars.

There is also demand for the Toyota Yaris, which has a purchase price upwards of 1.7 million rupees compared with a tax paid 3.1 million rupees.

It is estimated that the government is losing about a billion rupees through the import of Montero vehicles alone.

Spouses of state workers who accompanied them to an interview to get the car permit have also been given papers to open a tax file, if they did not have one already.

However salaries of all private sector workers are taxed at source through a pay-as-you-earn levy, whether or not they have an income tax file. Their contributory pension fund is also taxed by the government.