A group of Sri Lankans who have opened Letters of Credit (LCs) for new vehicles is appealing to the government to exempt them from the new high tax regime.
They say the LCs was opened before the new taxes were announced on March 31, and the vehicles are already en-route to Sri Lanka from abroad. In a letter to this newspaper, they say it is unfair and unjust to increase the tax on already ordered vehicles and point out to contradictions in the policy. For example, they said the objectives of the increased vehicle taxes are to cut import expenditure of imports, reduce the trade gap and reduce traffic congestion (by lesser vehicles on the roads).
On all these objectives, enforcing increasing taxes on ordered vehicles won’t change the statuesque.
They said most of them are unable to pay the new tax rate and won’t be able to obtain a refund. “The foreign exchange has already gone out and cannot be stopped,” the letter said.
If the vehicles are not cleared within 21 days of arrival, they will be auctioned by the Colombo Port or Customs at a much lesser value than the market price and anyway get on the roads.
“Thus increasing taxes on this category of imports doesn’t fulfill the objective of reducing traffic congestion unless the vehicles are not driven on the roads,” the letter said.
It said 95% of those who have imported vehicles from Japan or any other country have obtained credit facilities from finance companies which fit within their repayment capacity. “Please remember that these people also work towards developing their motherland though they don’t get a permit to import a vehicle as some privileged persons do,” it said.