Sri Lanka Cuts Import Duty & VAT on Buses & Trucks. Value Added Tax Lifted on Solar Cells & PV Panels

10th January 2012, www.lankabusinessonline.com

Sri Lanka has cut import duties on buses, trucks and engines, which will help improve the standard of tourist and commuter services in the island the finance ministry said in a statement.

The state has also lifted a custom import duty charged on imported lorry bodies and tyres for lorries and busses by 50 percent, the finance ministry said. It was not clear what the existing tax rates were.

Sri Lanka's customs office in a statement posted on its website said from January 01, value added taxes on buses, lorries and trucks were also lifted giving effect to a proposal on the 2012 budget.

Other items from which value added taxes were lifted, raw material used for spectacles and frames, sunglasses, perfumes, sports equipment, speakers and digital cinema equipment, photo sensitive semiconductor devices.

Value added tax on spares for poultry industry, sawn wood, mammoties, forks, moulding (steel, glass, rubber, plastic), machinery for rubber and plastic industries, greenhouses and poly tunnels.

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Sri Lanka Increases Taxes on Imported Vehicles

25th April 2011, www.lankabusinessonline.com

Sri Lanka has raised import duties on several categories of petrol-engined cars and three wheelers with steeper increases seen in larger hybrid vehicles, which had exceptionally low taxes earlier, officials said.

A senior Treasury official said there were revisions on several categories of vehicles.

On petrol cars with standard engines with capacities below 1,000 cubic centimeters the effective total tax rate will go up from the current 95 percent to 120 percent.

Between 1000 to 1,600 cc the effective rate will go up from 119 to 128 percent. On three wheelers the effective rate will go up from 38 percent to 50 percent.

On hybrid cars with engines below 2,000 cubic centimeters total duties will go up from 38 percent close to 50 percent.

Deputy director general of customs Ajantha Dias said an excise duty was raised by 8.0 percent on small hybrids but it will take up the total duties by a larger amount when added together.

On hybrids between 2,000 to 3000 cc duty will go up close to 75 percent and above 3,000 cc to 100 percent.

At the current rates even the large hybrids are taxed at a lower rate than smaller petrol cars.

Related Info :

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Sri Lanka Vehicle Registrations Up 74pct from January - October 2010 after Import Duty Reduction

27th December 2010, www.lankabusinessonline.com

The number of vehicles imported by Sri Lanka continues to surge after a sharp import duty reduction, with new registrations up 74 percent to 284,991 in January - October 2010 from a year ago, latest data shows.

In October alone, the number of vehicle registrations shot up 61 percent to 34,183 from a year ago, driven mainly by imports of cars which zoomed 914 percent to 3,753, according to central bank data.

Vehicle imports have been rising sharply since June, when the import taxes were slashed by the government as economic growth began accelerating after the end of the island's 30-year ethnic war.

Economic growth is expected to hit eight percent this year and government revenue has also risen despite lower import duty owing to the flood of vehicle imports.

According to central bank data, bus imports have shown the sharpest increase this year, as transport activity revived when connections to the north and east resumed after the war and travel picked up.

The number of buses imported during January - October 2010 rose 238 percent to 1,914 from the same period last year.

The number of trucks and other transport vehicles imported have risen by 57 percent to 9,564 over the same period.

Related Info:
Sri Lanka Vehicle Imports Bring Up Govt Revenue after Duty Reduction

Sri Lanka Removes Duty on Electric & Hybrid Cars

23rd November 2010, www.lbo.lk

Sri Lanka has made electric and hybrid cars duty free, while value added tax and rates of depreciation allowed for used cars has also been increased, a budget for 2011 said.

Another tax, social responsibility levy has been removed and nation building tax reduced from 4.0 percent to 3.0 percent.

But a Treasury official said excise taxes have been raised to recoup revenue losses from other taxes.

Though the price of new cars may not come down, an official said the price of older car could come down.

Some commercial vehicles were already on a lower duty.

President Mahinda Rajapaksa said electric and hybrid vehicles will be completely freed from excise duties and value added tax to promote environmental friendly vehicles.

Motor homes will also be made duty free, according to the budget document.

Sri Lanka allows cars up to three and a half years old to be imported.

Now three year old cars will be depreciated to 60 percent compared to about 80 percent earlier. Cars three and half years old will be depreciated to 55 percent.

The budget speech said the depreciation tables will comply with World Trade Organization rules.

The government will also allow state workers and state corporation employees to import cars at a lower duty.

A provision that allowed people who paid taxes of more than 500,000 a year for three consecutive years to import cars at 25 percent duty has been removed in the budget.

Sri Lanka Vehicle Imports Bring Up Govt Revenue after Duty Reduction

16th October 2010, www.island.lk

Government revenue from vehicle imports had hit Rs. 11 billion up to end September this year from Rs. 3.1 billion in the whole of 2009 according to oficial figures.

"The total figure will look very good by year-end,’’ a senior official said.

The surge of imports is attributed to the recent reduction in the duty rates that revived the sluggish motor vehicle import business making vehicles more affordable to buyers and boosting the motor trade.

The leasing business too, which was traditionally dominated by vehicle leases, had also benefited from the dramatic increase in vehicle imports, a senior official said yesterday.

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Sri Lanka Luxury Car Sales Up

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Download: Sri Lanka_Customs_Tariff_Calculator.xls

Sri Lanka Luxury Car Sales Up

04th October 2010, www.dailynews.lk, By Charumini de Silva

The luxury car segment recorded significant higher sales after the duty reduction on imported vehicles.

After the duty reduction the market has improved considerably and all segments showed an increase in sales, Prestige Automobile (Pvt) Ltd., Chairman/Managing Director, Heinz A. Reuter told Daily News Business.

He said the luxury segment recorded significant higher sales. “All key players in this luxury segment show improved sales due to a demand for latest models, which was one of the reasons that we introduced the new BMW 5 Series. It is regarded as the benchmark in its class.” The demand for luxury cars is increasing as expected after the duty reduction. Many potential customers delayed their purchase decisions due to a prohibitive duty which was among the highest in the world.

The leading luxury brands available in Sri Lanka are offering vehicles in the range of Rs 10 million and Rs 16 million. “The majority of the sales in the luxury segment are corporate sales, but there are cash sales and financing too. The prices have become competitive where in this range consumers can now buy the best cars in the world,” Reuter said.

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Sri Lanka Car Imports Double after Duty Break

06th August 2010, www.dailynews.lk

The Department of Motor Vehicles yesterday said import of cars has seen a dramatic increase with the reduction of vehicle import duty. According to Department statistics, 5,762 cars were registered by the Department last year while the Department has registered more than 4,079 cars upto August 1 this year.

The number of vehicle imports also rose last month when compared to the figures in the corresponding period last year. The Department registered 17,636 vehicles in July last year while this figure rose to 33,421 in July this year. Over 17,000 motorcycles were imported last month and the total number of vehicle imports up to August 1, 2010 exceeded 185,000, sources said.

Related Info:
Sri Lanka Vehicle Tax Slash Lauded by Motor Industry. SUVs to Come Down by Rs4mn. Car Prices too Come Down

Sri Lanka Slashes Excise Duty on Vehicles, Taxes Taken Out on Electronic Items

01st June 2010, www.dailymirror.lk

Sri Lanka has slashed an import excise duty on vehicles by 50 percent amid a pick up in economy and demand for vehicles, lifted a general 15 percent surcharge on all imports and slashed duties on electronic items, an official said.

With effect from today a car such as an Indian made Maruti which had attracted excise duties of up to 183 percent of its value will now be charged a duty of 90 percent, Sri Lanka's director general of fiscal policy S R Attygala said.

Cars attracted over 300 in excise duties, import duties, value added taxes, port and airport development levies and national security levies.

The government expects more revenue from car imports which plummeted last year amid high taxes. Attygala said with a pick up in the economy there was a demand for vehicles including the tourist industry.

The government has also lifted 15 percent surcharge on all imported items. Several import duty bands had also been adjusted.

Current bands of 0, 6, 16, and 28, have been revised to 0, 05, 15 and 30.

But Attygala said with the removal of the 15 percent surcharge there was a reduction even in the 30 percent band as earlier a 33 percent was paid with the surcharge.

Meanwhile taxes on items such as watches and camera's have been brought down to 10 percent to encourage retail trade especially targeting foreigners, he said.

Sri Lanka is expecting a surge in tourist arrivals and in many East Asian nations including Thailand and Singapore attract visitors simply for shopping.