Sri Lanka’s ad hoc tax policy boosts Japanese and Indian small cars
View(s):Sri Lanka has reduced import tax on Japanese and Indian made 800 and 1000 cc small cars while increasing duty on higher engine capacities, vehicle importers alleged. Issuing a gazette notification, the Finance Ministry has brought down the import duty on 800 and 1000 cc cars. This move will benefit Japanese and Indian made smaller vehicles, an official of Sri Lanka’s Vehicle Importers Association told the Business Times.
The tax for such cars will come down to around Rs. 1.35 million from Rs. 1.5 to 1.6 million, motor traders said adding that the majority of this segment of imports is dominated by the Indian Maruti cars.
Japanese small car imports will also record a boost under this initiative, they added. Pakistan-based auto assemblers have recently been exporting assembled cars to Sri Lanka and other regional markets – a trend which Islamabad plans to encourage, he said pointing out that Pakistan is especially “encouraging the assembly of small cars, including 600 cc and 1,000 cc cars. The government’s move will result in a flood of Japanese, Indian and cheap Pakistani smaller cars in the island, he said. Sri Lanka’s used car sales recorded a new high of 56,000 units in 2015, double the previous year, according to data compiled by JB Securities, a local brokerage. Almost all of those were Japanese-made vehicles.