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02 Nov, 2007 11:05:04
Sri Lankan motor trade lobbies against used car imports
Nov 02, 2007 (LBO) – Sri Lanka's motor trade is lobbying the government to discourage used car imports and change import duty to make brand new vehicles more affordable.
The Ceylon Motor Traders' Association (CMTA) says the government has still not responded to repeated proposals to restructure vehicle tax regulations and introduce a method of obtaining motor traders' opinion on taxes.

"We have given budget proposals to the treasury on conditional taxes and curbing reconditioned imports," Tilak Gunasekera vice chairman CMTA told LBO.

"Unfortunately nothing seems to have been addressed so far."

The association is still lobbying against importing used vehicles from Japan saying the vehicles are scrapped for a reason and they should not be imported to Sri Lanka.

This is in response to concern that Sri Lanka is becoming a dumping ground for used vehicles which cause pollution and can be unroadworthy.

Gunasekera says the association has proposed to the government to reduce the three and half year manufacture date rule on imports to two years.

This will help Sri Lankans to buy brand new vehicles which in turn will reduce pollution, spare part costs, maintenance and other complications.

"Little by little, the government should phase it out."

CMTA also has proposed conditional taxes on vehicles and oppose the 235 percent or more 'irrational' tax levied on the super luxury vehicles as well as the cheapest compact car.

The association has proposed to the government to tax according to the engine capacity, luxury options and other features of a vehicle so locals of lower income levels can afford newer vehicles that help the country in the long run.

The price of used vehicles has also increased narrowing the difference between used and brand new, says Gunasekera.

"As a result of the small price difference, people go for brand new cars rather than used ones."

The used-to-new car purchase ratio which was at 85 percent to 15 percent has now changed to a one-to-one ratio CMTA says.

Rather than arbitrary taxation methods, the government should also consult the industry on such decisions, says Gunasekera.

Critics say that ordinary citizens of the country cannot afford brand new cars. They are usually reserved for the super-rich and priviledged sections of society such as politicians and state workers, who get tax free or tax slashed cars.

State workers also get tax free salaries and tax free pensions.

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READER COMMENT(S)
4. doch1500 Nov 05
Yes I agree with Mr. Gunesekara, CMTA should be consulted when it comes to taxing cars. I too would love to be able to own a brand new car. Only here in SL ( The paradise Island) do we see car prices going up by the year….

Yes Strongly oppose the issuing of tax free permits to Govt. Sectors…. Y aren’t we (Private sector workers) contributing to the development of the country, paying absurd taxes, and jet fuel prices….

Sure Doctors are a great assert for the country and their service is incomparable but , after all their income is not taxed in any way – Is it ?- ( private practice) I personally have nothing against t doctors- just that fact that some people get all the benefits and whilst others get crap.

3. KPM Nov 04
I fully agree that the government should improve public transport, but as a car user, I must say I support a high tax on private vehicles. Like it or not, us private vehicle users create a huge negative externality on society by polluting and clogging up the roads.

Nobody can argue that Sri Lanka's economic development has been hampered by the scarcity of vehicles. Given that, if anything, we should be looking to reduce the number of private vehicles on our roads. I would even be supportive of a Singapore style annual tax on private vehicles.

As for the trade lobby, I think they are simply being selfish and trying to protect their business interests. I do not know who in their right minds can say that a three year old car is too run down to be imported, and pollutes too much. Any such person should take a reality check and look around them on the streets! I hope the government disregards such ridiculous arguments aimed at helping the car dealership industry in this country, and very few others.

2. R. A. Nov 03
I do agree with Mr. Priyankara. Government should reduce the vehicle import tax or they should develop the public transport.
1. Priyankara Nov 02
Mr. Gunesekara is correct. I m working out of my country and I wanted to buy car from Sri Lanka but I couldn't because the tax is more that the cost of the car.

I don't know which direction is our country going. Government sould think about the poor people who earns a normal salary. Otherwise we have to work in other countries for ever.