Parliamentarians will not be allowed entirely tax-free vehicles, the Cabinet decided on Wednesday.
Those entitled to the import of such vehicles will be required to pay around 10 to 20 percent of the cost of the vehicle as taxes.
When the subject was taken up for discussion, Economic Development Minister Basil Rajapaksa pointed out that the UNP’s John Ameratunga called for the payment of a nominal duty. This was at a meeting of party leaders.
“Don’t take credit for everything. Give them also the honour. Now that they have asked for it, let us agree to it,” remarked President Rajapaksa.
Despite the MPs paying 10 to 20 percent duty, the government will lose billions of rupees on the provision of this facility to some 190 MPs.
The loss in public funds has increased due to the decision to raise the permit value of the vehicles from US$ 35,000 (Rs. 4.9 million) to US$ 50,000 (Rs. 5.7 million). This came after some MPs complained that the earlier amount was insufficient.
Parliamentary Affairs Minister, Sumedha Jayasena said the matter of raising the value of vehicles for MPs was first taken up at the party leaders’ meeting. They said the MPs had complained that US$ 35,000 was not sufficient to import a full option double cab.
“Accordingly I presented a cabinet paper that the amount be increased to US$ 45,000, but as the MPs felt that the amount was not sufficient, it was increased to US$ 50,000,” she explained.
Usually for a diesel vehicle a duty of 340 percent of the value is imposed and for petrol vehicle, the duty is 280 percent.
The duty free permit was restricted to US$ 10,000 during the 2001 UNP government and increased to US$ 15,000 during the 2004 UPFA government.
The Sunday Times also learns that some MPs who had purchased their vehicles through the Parliamentary Affairs Ministry on a loan basis have failed to repay the loan fully and the balance has been written off.
The amount involved was not available, but at least four former MPs confirmed they were aware of instances where the loans had been written off. Meanwhile, the JVP yesterday hit out at the decision to increase the value of the vehicles for MPs.
“This is a waste of public money. Such a high amount has been permitted to import luxury vehicles. We will not go for luxury vehicles, but use the permit to buy low-cost vans,” JVP frontliner Anura Kumara Dissanayaka said.