Private bus owners are lobbying the government to remove VAT payments slapped on lease rentals of registered buses.
Currently, around 17,500 private passenger buses are in operation and over 90 percent of them are bought on a lease.rn
rnMost owners opt to re-lease their buses, to meet costs of refurbishment and spare parts. Funds are also used to buy a second new bus.rn
rnThe government gives a VAT rebate for on lease rentals if the buses are new. Once the lease is paid up in around two-years, most owners opt to refurbish or sell them to third parties.rn
rnldblquote This is where the problem comes up, because the third party has to pay a VAT on the lease rental because its a second hand bus,
dblquote says D P Kumarage, CEO Peoples Leasing and member of the taskforce appointed by the Treasury to tackle the issue.rn
rnKumarage says second hand leases is a growing market for the leasing industry, as lenders are comfortable to release funds to owners who opt to expand their fleet.rn