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Tue, 29 July 2014 11:34:06
Sri Lanka allows electric cars, hybrids duty free
23 Nov, 2010 08:45:16
Nov 23, 2010 (LBO) - Sri Lanka has made electric and hybrid cars duty free, while value added tax and rates of depreciation allowed for used cars has also been increased, a budget for 2011 said.

Another tax, social responsibility levy has been removed and nation building tax reduced from 4.0 percent to 3.0 percent.

But a Treasury official said excise taxes have been raised to recoup revenue losses from other taxes.

Though the price of new cars may not come down, an official said the price of older car could come down.

Some commercial vehicles were already on a lower duty.

President Mahinda Rajapaksa said electric and hybrid vehicles will be completely freed from excise duties and value added tax to promote environmental friendly vehicles.

Motor homes will also be made duty free, according to the budget document.

Sri Lanka allows cars up to three and a half years old to be imported.

Now three year old cars will be depreciated to 60 percent compared to about 80 percent earlier. Cars three and half years old will be depreciated to 55 percent.

The budget speech said the depreciation tables will comply with World Trade Organization rules.

The government will also allow state workers and state corporation employees to import cars at a lower duty.

A provision that allowed people who paid taxes of more than 500,000 a year for three consecutive years to import cars at 25 percent duty has been removed in the budget.

Corrected/Updated

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READER COMMENT(S)
6. g.g.padmananda Jan 10
What are the duties we have to pay when a motor car is imported? Example please.
5. Marius Nov 26
What are the hybrid cars available in SL ? Unable to find any
4. RW Nov 26
Ditto we can think of protecting the industry when we have public confidence established thru known and time tested brands
3. X Nov 24
I think it is a good idea to waive off Duty of Electric cars. If the utility can offer a lower Off peak tariff, that will help them to improve the daily load profile as well.

Lower duty and lower tariff will make the investment more atractive as the captital cost and running cost both of electric cars will be lower and that will off set some of the disadvantages of electric vehicles such as low range per charge. Doubt Sri Lankan market size is large enough to manufacture cars.

Atleast until we have a domestic car prototype ready, we have to popularize the electric vehicles and build consumer confidence by importing known brands. For that this is a step in the right direction.

2. Siripala Nov 23
I don't see why GOSL has to waive off duties on hybrid/electric cars.

Why can't we build them here and sell them here.

1. hasi84 Nov 23
What about the Regional Infrastructure Development Levy?
The Regional Infrastructure Development Levy on import of vehicles is to be removed with effect from 1 January 2011

At present, the levy is charged on Motor Vehicles imported under specified HS Codes at three rates (i.e. 5%, 7.5% and 10%) dependant upon the cylinder capacity, seating capacity and specified weight.Wouldn't this have a significant impact on the price of Brand New vehicles?