The upcoming budget is set to remove the 15% tax rebate currently being given on vehicle imports, said Prasad Manage of the Sri Lanka Vehicle Importers Association. He pointed out that if the rebate is removed, it will increase the price of all vehicles by 15%.
Under the current system, the value of the vehicle is taken from the websites of the country where the vehicle is imported, all relevant taxes (duty) are deducted from that value, and in addition, a 15% rebate is given to importers. As a result, taxes are levied on only 85% of the total value.
However, according to sources received by the Vehicle Importers Association, the government is focused on removing this 15% rebate.
“If we do that, another 15% will be added on vehicles. For a value of 100 rupees, we have been paying 85 rupees for so long. But now there is news that in the future we will have to pay 100,” he says.
Accordingly, if this tax revision change is implemented, we will see an increase in the prices of all types of vehicles after the budget, he says.
He further states that the prices of all vehicles, from small vehicles like the very popular Alto and Wagon R to large vehicles, will increase.