Bus fares up due to VAT

The President of Ceylon Private Bus Owners’ Association Gemunu Wijeratne says that the government’s decision to increase VAT to 18% from the first of January will have a negative impact on the private bus industry, and therefore the new tax revision may lead to an increase in bus fares.

“During the last 25 years, no tax was imposed on the import of standard private buses, but some tax was levied on the import of luxury buses. The imposition of a tax on the import of private buses was not relevant to public transport,” he said.

“Unfortunately, with the increase in the dollar fee, the price of an average bus, which used to be between 55 to 57 lakh rupees, has now increased to 13.7 million rupees. We had 20,000 buses, now it has been reduced to 17,000. Currently, there is a shortage of 4000 buses.

“With the increase in VAT, the price of a standard bus has increased to 15.7 million rupees. With this price increase, bus owners are unable to import buses. It is clear that along with VAT, spare parts, lubricants and service prices will increase. Also, the increase in the price of fuel will also be affected. This new VAT will be added to the price of fuel, so the price of fuel will increase.

“Considering all these factors, there will be a specific increase in bus fares, which will directly affect the people who use buses as a means of transportation,” he said.