Luxury tax has no effect on small motor vehicles: Finance Ministry

Oct 29, 2019 (LBO) – Sri Lanka’s Finance Ministry says that the luxury tax imposed on motor vehicles will not be relevant to small motor vehicles.

Accordingly, prices of Toyota Vitz, Suzuki Every, Toyota Roomy, Suzuki Alto, Suzuki Baleno, Daihatsu Petrol, Honda Grace, Suzuki Wegon R, Toyota Aqua will not be affected by this luxury tax.
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The Finance Ministry said that the basic models of Axio, Premio and Allion will also not get affected by this tax.

Vehicles such as vans, single cabs, double cabs, motorcycles and motor tricycles are also not subject to this luxury tax.

As per the new regulations, the luxury tax will only be imposed when importing diesel and petrol cars and jeeps worth over 3.5 million rupees. (Only for the amount exceeding this limit)

The luxury tax is effective from 6 March 2019 and the new tax will apply to all luxury vehicles imported after opening letters of credit after that date.

There will be a luxury tax for hybrid vehicles when their CIF value is exceeding 4 million rupees (for the exceeding amount). For electric vehicles, the amount is 6 million rupees.

As the technology for automobiles develops, the luxury of a vehicle is determined not by the engine capacity but by the features of a vehicle. The chargeability of this tax is now based on the price of vehicle instead of engine capacity.

Accordingly, the taxes levied on the cylinder capacity on petrol cars below 1800 cylinder, diesel cars and jeeps below 2300 cylinders and on electric cars below 200 kW will be lifted from November.

Related:

Tax concessions and benefits for public servants announced during VoA

Sri Lanka revises excise duty, implements luxury tax on motor vehicles

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