Ceylon Motor Traders Association says they understand duty increase in small cars

Aug 03, 2018 (LBO) – Ceylon Motor Traders Association (CMTA) on Friday said they understand the Government’s policy decision taken recently to increase excise duties targeting the small motor cars segment.

The Association said the excise duty structure that was proposed in the budget 2018 had a favorable differential for small motor cars which is likely to have driven the strong vehicle growth experienced in 2018.

CMTA said this situation has added a further strain on the nation’s current account which is already seeing an expanding fuel import bill given the rising global oil prices.

“In 2017 according to the Department of Motor Traffic, approx. 60 percent of all motor vehicle registrations, for that year, was accounted for by vehicles under 1000 cc,” CMTA said.

“Subsequent to the tariff revisions proposed in the budget 2018, small cars accounted for approx. 86 percent of all motor vehicle registrations during the first two months of 2018,”

“In addition, this growth in the quantum of vehicles is likely to have resulted in a significant rise in the levels of congestion, specially within the cities.”

The Association said the raising of excise duties is likely to stem the growth for small cars, but they believe that this needs to be coupled with medium to long-term policies that would result in the sustainable growth of the motor industry.

“This would also reduce the need to resort to such ad hoc excise duty changes, which leads to the ‘stop-go’ nature of new vehicle imports, that leads to uncertainty and causes a strain on both the consumers and firms in the industry,”

“The CMTA looks forward to participating in a long-term policy dialogue with the Government, so the aspirations of the industry and the international manufacturers they represent could be aligned with the requirements of the Government.”