Sri Lanka’s Finance Minister raises taxes on small vehicles

Aug 01, 2018 (LBO) – Sri Lanka’s Finance Minister has signed the gazette notification to amend the excise duties of vehicles below 1000cc category with effect from 01 August 2018, the Finance Ministry said.

Accordingly, a unit tax of 1.5 million rupees will be taxed for a motor car below 1000cc while a unit tax of 1.25 million rupees will be taxed for a hybrid electric car below 1000cc.

The Ministry, however, said these new taxes will not be applied to vehicles that opened Letter of Credit before 01 August 2018 and will be cleared before 31 January 2019.

Sources said as per the new taxes a Wagon R will go up by around 425,000 rupees and other vehicles below 1000CC will also be increased by around 200,000 to 450,000 rupees.

Sri Lanka’s motor vehicle population grew by 7 percent to 7.2 million in last year with import expenditure on motor vehicles also showing a 5 percent growth.

The year 2017, however, saw a fall in import volume by 11 percent with yearly new registrations also declining by 9 percent.