Review Taxation Structure for Vehicle Imports

By September 30, 2019Causes, Emerging Industries

Import duty and other taxes imposed on vehicle imports have always been subject to ad-hoc revisions aimed at increasing the tax revenue for the government that is carried out with little regard for ground realities and the impact it has on the general public. A prime example was the revision proposed at the previous budget for the import of electric vehicles where there were no vehicles manufactured that met the proposed concessionary taxation criteria. It turned out to be yet another half-baked product that lacked any substance which was put forward by the current government.

Occasionally there have been instances where import taxes have been reduced. But such proposals were short-lived and mainly served as election bait.

While vehicle import taxes serve as a major source of tax income for the government, officials must leverage it in a manner that does not deprive the general public of the opportunity to own a safe and good quality vehicle. This has become a vital factor in determining the quality of life, especially for professionals employed in the private sector who do not enjoy the privilege of a vehicle permit but nevertheless contribute positively towards the economy.

In addition, the future government must seriously consider offering a tax concession for vehicle imports for Sri Lankans employed abroad who generate a significant portion of the country’s foreign income.

~ Navinda Wickramasinghe

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