News
Budget to put brakes on duty-free vehicles
View(s):- Treasury official says move to suspend facility offered to public servants is linked to $7 billion foreign reserve target
By Damith Wickremasekara
The duty-free vehicle permits issued for public sector senior officials are unlikely to be revived in the upcoming budget, the Sunday Times learns.
Already permits for some 23,000 officials have been held back, while more officers are becoming eligible for the facility.
The Sunday Times learns that the government was considering holding back the facility as part of its measures to achieve the US$7 billion foreign reserve target by the end of the year—a goal set by the International Monetary
Fund (IMF).
A Treasury official said that with about a month left for the presentation of the budget for next year, no consideration has been given to reviving the system of issuing the duty-free vehicle permits, despite requests from senior officials, doctors, lecturers and other professionals.
The move comes as vehicle imports continue to soar, with total foreign exchange outflow due to vehicle imports reaching US$918 million during the first eight months, according to the Central Bank of Sri Lanka (CBSL). August alone saw the highest monthly vehicle import bill, amounting to US$249 million, covering both personal and commercial vehicles.
The government also has achieved its revenue targets from tax collections through vehicle imports. So far, the government has earned Rs 470 billion, though the annual target was set at Rs 450 billion.
Since the import of vehicles was relaxed in February this year, 37,115 vehicles have been registered.
The Treasury official said that currently the import of the vehicles was being carefully carried out in consultation with the Central Bank. However, the number of vehicles imported had not exceeded estimates placed by the government, considering that the imports were allowed after a five-year period.
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