Japan Ups Sri Lanka Auto Market Share with Hybrids. India's Share Down to 45pct. China Third with 5pct

01st March 2012, www.lankabusinessonline.com

Japan has increased its share in Sri Lanka's auto market to 36 percent from 33 percent in value with a surge in hybrid vehicles, amid a boom coming after a cut in taxes, Sri Lanka's main business chamber said.

The Ceylon Chamber of Commerce said in an analysis of the auto market that market leader India's share has in terms of value had fallen to 45 percent to 51 percent. China was third with 5.0 percent.

The value of imports had increased to 219 billion rupees from 117 billion rupees.

The CCC said 57,886 cars and were registered in 2011 up 11 percent while 525,421 vehicles of all types were registered in 2011, up 32 percent from a year earlier including over 250,000 motor cycles.

In 2011, 5,927 hybrid vehicles were imported up from 438. "This growth momentum is likely to continue with the increase in fuel prices," the Ceylon Chamber of Commerce said.

"Japan is the leading supplier of hybrid vehicles into Sri Lanka in almost all categories of vehicles except for cars of cylinder capacity exceeding 2000 cc (cubic centimeters), where Germany is the main supplier."

Transport between 5 to 20 tonnes have risen over 10 fold to 48,384 to 4,359. India supplied 91 percent of the total followed by Japan at 15 percent.

The Chamber said motor cars of less than 1,000 cc engine capacity had grown 222 percent partly helped by Tata Nano cars.

More than 100,000 petrol driven three wheelers have been imported in 2011. Diesel three wheeler lagged are there are only 20,000 in the country. The chamber said 99 percent came from India.

Sri Lanka New Vehicle Registrations up 42pct in 2011. New Vehicle Market to Grow by 10 to 15pct in 2012

26th February 2012, www.sundayobserver.lk, By Lalin Fernandopulle

The brand new vehicle market will grow by around 10-15 percent this year said Ceylon Motor Traders Association Chairman and Sathosa Motors PLC Executive Director, Tilak Gunasekera.

He said that the new vehicle registrations increased by 42 percent last year and added that the number of vehicles registered in 2011 was 526,421 compared to 369,243 in 2010.

Global car sales recorded a marked growth last year recovering from a lull when fears over prospects for Western Europe and product shortages from Japanese automakers prompted buyers to move to the sidelines, reports stated.

Global volumes rose two percent year-on-year in December led by a five percent month-on-month rebound in Asia. Purchases in the United States also advanced nine percent y/y in December, climbing to an annualized 13.6 million units from an average of 13.4 million during the previous three months.

Gunasekera said that global vehicle sales recorded a substantial growth last year compared to the previous year. The number of units sold in 2010 was 74.3 million while in 2011 it was 77.5 million which is a 4.3 percent increase. There is a good and steady growth in the global vehicle market.

With regard to the oil price hike he said the price increase will affect the transportation cost and thereby it will have a cascading effect on the economy such as food, passenger transportation cost, gas and essential items. Global oil prices continue their upward spiral, climbing to their highest levels in nine months over Iran’s warning that it may cut off oil exports to more European countries.

On Tuesday, oil prices reached their highest levels since May as Benchmark crude rose by $2.65, or 2.6 percent, to end the day at $106.25 per barrel on the New York Mercantile Exchange, marking the highest price of oil since May 4, 2011.Meanwhile, the price of Brent crude climbed by $1.61 to close at $121.66 in London.

Motor cycles, three-wheelers and cars are the main categories of vehicles imported by Sri Lanka in large volumes.

* Motor Cycles

The number of motor cycles registered in 2010 was 204,811. In 2011 it increased to 232,120, a 13 percent growth compared to 2010

* Trishaws (Three-wheelers)

The number of trishaws registered in 2010 was 83,114 and in 2011 it was 138,436 recording a 66 percent growth.

* Motor Cars

The number of motor cars registered in 2010 was 23,072 and in 2011 it was 57,887, a 161 percent growth.

Related Info :

• Sri Lanka Motor Sector Profitability Drops but Rising income & Economic Growth Keeps Demand High

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New Vehicle Registrations in Sri Lanka up by 55pct in June 2011

25th July 2011, lankapuvath.lk

Latest statistics indicate that new vehicle registrations in June 2011 reached 48,157 units, up 55.8 percent compared to 30,905 units in the same period 2010.

The Central Bank giving latest statistics indicated the biggest increase has been in three-wheelers which have increased from 8007 to 13,753 this year and accounts for a 71% increase.

The registration of Motor cars has been the second largest, showing an increase from 606 last year to 5,069 this year and accounts for a 736% increase.

Motor Cycles have also shown a significant increase from 18,725 last year to 22,690 this year and accounts for a 21% increase.

New registrations for all other motor vehicles such as buses, dual purpose vehicles, lorries and other transport vehicles for goods, tractors, hand tractors and other land vehicles, have also risen, the new data indicates.

Related Info :

• Sri Lanka Increases Taxes on Imported Vehicles

• Sri Lanka Motor Sector Profitability Drops but Rising income & Economic Growth Keeps Demand High

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

Sri Lanka Motor Sector Profitability Drops but Rising income & Economic Growth Keeps Demand High

30th June 2011, www.lankabusinessonline.com

Sri Lanka's motor sector companies' profitability has fallen after the reversal of some import tax cuts that caused a profit surge, although vehicle demand remains strong with rising incomes and economic growth, a report said.

Motor sector companies reported the highest growth in net profit for the last couple of quarters after the government slashed import duties last year, Lanka Securities said in a report on corporate earnings for the January - March 2011 quarter.

Net profit growth in the sector was 132.5 percent in the quarter from a year ago owing to the tax cuts but profits were down compared with the previous quarter.

"The sector demonstrated a monstrous growth in profitability - by 132.5 percent year-on-year to 1,119.8 million rupees - which can be attributable to the overwhelming demand for vehicles hyped by the reduction in vehicle imports duties," it said.

Nevertheless, the sector saw a 13.4 percent quarter-on-quarter drop in earnings - a sign of the fading effects of the tax revision, the report said, referring to the re-imposition of some import duties by the government.

"Hence, we are not anticipating abnormal profit growth in the forthcoming periods that was seen in the last quarter," Lanka Securities said.

"But with the prevailing economic conditions in the country and growing demand along with per capita income we anticipate sustainable growth in the companies in the sector.".

Sri Lanka's economic growth has begun to accelerate with the end of its 30-year ethnic war in 2009 with vehicle imports remaining high.

Related Info :

• Sri Lanka Vehicle Imports in March up by 51.1pct. Three Wheelers & Motorcycles Dominate

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• Sri Lanka Vehicle Imports up by 75.9pct in 2010 amidst Strong Economic Growth

Sri Lanka Vehicle Imports in March up by 51.1pct. Three Wheelers & Motorcycles Dominate

22nd May 2010, ww.thesundayleader.lk

The number of vehicle registrations in March increased by 55.1% year on year (YoY) to 45,945. That included a 19.9% YoY increase of motorcycle registrations to 22,028 and a 72.2% YoY increase in three wheeler registrations to 12,166.

Meanwhile the number of vehicle registrations in the first quarter of the year increased by 65.1% YoY to 121,155. That included a 26.9% YoY increase in motorcycle registrations to 59,534 and a 92.8% YoY increase in three wheeler registrations to 31,027.

Related Info :

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

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 :

• Sri Lanka Vehicle Imports up by 75.9pct in 2010 amidst Strong Economic Growth

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• Sri Lanka Removes Duty on Electric & Hybrid Cars

Sri Lanka Vehicle Imports up by 75.9pct in 2010 amidst Strong Economic Growth

14th March 2011, www.lankabusinessonline.com

Imports of all types of vehicles to Sri Lanka rose 75.9 percent to 359,243 in 2010 amid strong economic growth which increased demand and also a cut in state taxes for cars, government data showed.

Imports of motor cars rose four fold to 23,072 in 2010 from 5,762 a year earlier after the state cut some taxes on cars imported by ordinary citizens. In December alone 4,583 cars were imported.

Sri Lanka has kept taxes on cars imported by ordinary people at high levels blocking their access to cars at high rates while giving tax slashed cars to state workers and completely tax free cars to lawmakers in parliament.

This year Sri Lanka is to remove a long-standing discriminatory law that protected rulers and state workers from income taxes.

Rights workers have pointed out that Sri Lanka's constitution lacks absolute guarantees of equality to automatically outlaw unjust and discriminatory laws.

Motor cycles imports rose 51.2 percent to 204,811 in 2010, with 20,000 being brought down in December alone.

The number of economical scooters are also rising in Sri Lanka's streets including those driven by females, showing an increase in the freedom of mobility of the female population.

Three wheeler vehicle imports rose 120 percent to 85,648. Three wheelers are mostly used as commercial taxis. Bus imports rose 237 percent to 2,491. Goods transport vehicles including lorries and trucks rose 36.2 percent to 11,467.

Land vehicles, which includes tractors and 'hand tractors' rose 28 percent to 19,664. Unspecified 'other' vehicles rose to 9,382 from nothing a year earlier.

Related Info :

• Sri Lanka Vehicle Sales to Double in 2011 following Rate Cut

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

• Sri Lanka Customs Tariff Calculator by HS Code

• Download: Sri Lanka_Customs_Tariff_Calculator.xls

Sri Lanka Vehicle Sales to Double in 2011 following Rate Cut

16th January 2011, www.sundayobserver.lk, by Lalin Fernandopulle

The booming vehicle market is expected to further surge in sales this year following import duty reductions last year that gave a kick start to the once ailing motor industry in the country.

Motor vehicle dealers are confident that there will be a 100 percent growth in sales this year due to the drastic reduction in import duty which has increased sales by around 75 percent since mid last year.

Chairman Ceylon Motor Traders Association, Tilak Gunasekera said that vehicle sales had shot up sharply since the slashing of the import duty mid last year and added that most dealers had recorded substantial growth in sales.

“The motor car market will record 100 percent growth this year giving a new lease of life to the once dormant market that plummeted sales by around 60 percent”, Gunasekera said.

The vehicle market in Sri Lanka went through a bad patch a few years ago due to a 300 percent import duty, the highest in the world. The import duty on vehicles is yet high compared to many countries in the region.

New registrations went up 75 percent to 284,991 from January to October last year, statistics revealed.Around 3,700 new cars were registered from January to September last year while around 5,700 new cars were registered in 2009.

The number of registered vehicles rose 61 percent in October alone last year to 34,183 from a year ago driven primarily by import of new cars. Vehicle merchants said that the reduction of import duty will help government coffers as there will be more vehicle imports.

Vehicle import revenue will contribute to the economic growth which is predicted to be around eight percent this year.Central Bank data revealed that import of buses, trucks and other transport vehicles have risen sharply following the duty reduction.

The import of trucks and other transport vehicles have increased by around 57 percent to 9,564 from January to October 2010.

The import of vehicles has increased sharply since the liberation of the North which is fast returning to normal.

Gunasekera said the car sales market which had dropped by around 60 percent received a big boost with slicing of duty and added that most importers are doing well.

The sale of new cars had been around two to three units a month before the reduction of duty while today sales have peaked. Buyers of new cars are on the waiting list as the lead time is around four months.

The VAT component on imported new vehicles was slashed to 12 percent from 20 percent in the 2011 budget that gave incentives to used vehicle importers. The 70 percent duty on used cars was reduced to 55 percent. Sri Lanka imports new and used vehicles from Japan and India.Japan has a huge used vehicle export market due to the low price of new vehicles.

“The second-hand vehicle market has benefitted from the concessions given through the budget”, Gunasekera said.

Related Info :
• Sri Lanka Car Imports Double after Duty Break
• Sri Lanka Removes Duty on Electric & Hybrid Cars

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 Hambantota Magampura Port Attracts Vehicle Assembly and Cement Manufacture

22nd October 2010, www.lankabusinessonline.com

A new port being built in Sri Lanka's southern Hambantota has drawn investment proposals from local and foreign businesses including the local Senok Combine and Micro Car for vehicle assembly, officials said.

Madras Cements, India's fifth largest cement maker and part of Chennai-based Ramco Group, has also proposed investing in a cement terminal at the port, a greenfield site to be operated as a free port with no taxes.

A Sri Lanka Ports Authority statement said that 27 local and foreign companies among 63 that collected the request for investment proposals have submitted bids.

"The response shows investors are keen to invest in the new port," said Agil Hewageegana, SLPA chief engineer in charge of the port project in Hambantota known as Magampura Port.

He said some of the local firms that sent proposals are in joint ventures with foreign partners.

The new deep water harbour close to the main shipping route across the Indian Ocean, to function initially as an industrial port, was built by Chinese firms and largely funded by Chinese loans.

The SLPA received six investment proposals for cement terminals in Hambanthota when bids closed last week, two for vehicle assembly, two each for liquid petroleum gas and petro-chemical complexes, and three for warehousing.

Investors have also bid to set up a sugar refinery and a fertilizer plant.

The two local firms interested in vehicle assembly are Senok Trade Combine, agents for vehicle manufacturers like Audi, Subaru and Skoda, Transmec Engineering, which assembles the 'Micro Car' in Sri Lanka.

Pakistan's Jamshoro, based in Lahore, which had bid for part of the Shell Gas assets in that country has submitted a proposal for an LPG terminal.

Proposals petro-chemicals investments have come from a Singapore firm and Advance Surfactants Lanka, which makes industrial chemicals.

The SLPA said a total land area of 2,000 hectares belonging to the Magampura Port will be available for local and international entrepreneurs.

"Magampura Port is being developed as a multi-purpose, industrial and service port and aims to make the best of the expanding markets of the Indian sub-continent, with short transit times to India, Africa and the Gulf region," it said.

The government plans to start phase two of the project during the last quarter of this year with the contract agreement recently signed between China Harbour Engineering Company and SLPA.

The financial assistance would be extended by the the People's Republic of China on a concessionary basis, the statement said.

The second phase will expand and deepen the harbour, adding more berths and cranes to handle containers.

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.

Related Info:
Sri Lanka Luxury Car Sales Up

Sri Lanka Customs Tariff Calculator by HS Code

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.

Related Info:
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Sri Lanka Customs Tariff Calculator by HS Code

Download : Sri Lanka_Customs_Tariff_Calculator.xls

Sri Lanka's Micro Exports Cars to Nepal

30th September 2010, www.dailynews.lk, By Harshini Perera

Micro Cars Limited will be exporting ten cars, of the Micro MX7 model as an initial shipment to Nepal. There will be 150 cars in line with the first year commitment from Micro to Nepal which will include Micro cars as well as mini vans in the future.

The cars are sold in Nepal with the franchise of a Nepal distributor who is financially strong, well-informed about the car market and who can deliver a good after service facility, Micro Cars Limited Chairman/CEO Dr Lawrence Perera said at the shipment of cars to Nepal yesterday.

He said the Micro MX7 will be exported at US $10,000 without export taxes which is generally priced at Rs 2.2 million in Sri Lanka.

The car will be priced at Rs 2.3 million in Nepal. The company uses 40 to 50 percent import component in vehicle manufacturing while 35 percent is from the local component. It encourages the local repairers and manufacturers.

“We have come to a proposal with the Transport Ministry to test ten Micro buses to be used in the public transportation system as an initial test.

“The car market in Sri Lanka is around 20,000 a year but we as a local company could only take 10 percent of the market share,” he said.

“We have a larger market share of 80 percent in the SUV jeep segment while the small car segment is 10 to 12 percent and 15 percent for medium cars. The best selling vehicle is SUVs and four new models will be launched in the future,” Dr Perera said.

Image: Economic Development Minister Basil Rajapaksa inspecting a car to be exported to Nepal while Micro Cars Limited Chairman/CEO Dr Lawrence Perera looks on. Picture by Chaminda Hittetiya

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 Vehicle Tax Slash Lauded by Motor Industry. SUVs to Come Down by Rs4mn. Car Prices too Come Down

02nd June 2010, www.thebottomline.lk, By Santhush Fernando

The local automobile industry, badly hit hitherto by the global financial crisis and exorbitantly high domestic tax regime, is expected to see a drastic drop in vehicle prices after Treasury slashed excise duty on vehicles yesterday.

Almost all vehicle importers whom The Bottom Line spoke to were very positive over the tariff revision, but majority opined that they were in the dark regarding the exact net duty levels applicable. (Pl see below JKSB Comment with item-wise chart of new duty/tax).

“It’s very difficult to tell precisely. However, this will give a badly needed boost to the automobile industry. At a glance, the price drop of cars may range from Rs.300,000 to Rs.1 million. Sports Utility Vehicles (SUVs) could anticipate a drastic decline up to Rs.4 million, while double cabs could come down by Rs.1.5 to 2 million, roughly,” President of Ceylon Motor Traders’ Association (CMTA), Zeeniya Rasheed said.

Unconfirmed sources say that the excise duty applicable to vehicles with an engine capacity below 1,000cc has come down to 7 from 34%. Vehicles with the capacity between 1,000 to 1,600cc would see excise duty drop from 44 to 17% while luxury vehicle categories would be subject to 64%, instead of the current 27%.

Fifteen percent surcharge, which is also applicable on electrical appliances imports, has also been scrapped.

“It’s really difficult to ascertain the exact formula as there’s cascading structure with one tax touching another tax. Nobody knows until we get confirmed through a ‘Cusdec’ (Customs declaration). It’s very complicated,” an automobile industry source said.

At present vehicle imports are subject to six ‘fixed’ taxes – Ports Authority Levy (PAL) of 5%, surcharge of 15%, Nation Building Tax (NBT) of 3%, Social Responsibility Levy (SRL) of 1.5%, Road and Infrastructure Development Levy (RIDL) of 2.5%, Value Added Tax (VAT) of 20% and three ‘varying’ taxes – Customs Import Duty (CID), Cess, and Excise Duty.

Speaking to The Bottom Line, Chairman United Motors PLC, Ranjith Fernando, said that the tariff revision would be a relief to both importers and buyers, alike.

“It’s certainly a welcoming move. The prices of cars will come down drastically. As many importers refrained from bringing large stocks and kept minimum stocks,” he said.

According Fernando, currently a Pajero was subject to between 300 to 400% total compound tax, depending on engine capacity and type of fuel.

The new tariff is likely to have an impact on locally-assembled vehicles.

“As it is there’s a huge price differential between imported and locally-assembled vehicles. However, with this tariff cut prices of the latter will also have to come down,” he added.

General Manager – Sales and Marketing, Associated Motorways (Pvt) Ltd., Shivantha de Zoysa said that they were yet to ascertain the full impact of the tariff revision.

“There are nine different types of sub-duties, while the government had introduced the tariff cut on excise duty. Currently, petrol vehicles with an engine capacity below 1,000cc are subject to a total net duty of 187%, on its CIF (Cost Insurance & Freight),” he pointed out.

According to de Zoysa, prior to the duty revision, a total net tariff of 217% was applicable for petrol vehicles with an engine capacity between 1,000 to 1,600cc, while vehicle categories from 1,600 to 2,000cc and above 2,000cc were subject to total net duty of 290 and 299%, respectively.

The number of brand new vehicles registered in 2009 was a mere 7,437 when compared with 25,325 registered in 2008, which was a massive drop of 70.63%. Government tax revenue, in contrast to Rs.17.4 billion earned in 2007, dropped to Rs.11.06 billion in 2008 and to Rs.3.25 billion in 2009.

Vehicles registrations expected to increase
In an Equity Research Report, releases by Bartleet Mallory Stockbrokers (Pvt) Ltd, says it expects vehicle registrations in 2010E and 2011E to increase.

“New vehicle registrations over the first four months of 2010 amounted 95,929, indicating an upward movement. Vehicle registrations could see an immediate improvement in 2010 with the economy gaining traction coupled with low interest rate,” it stated.

“In addition, tax reforms could further benefit vehicle imports, in our view,” the report noted.

Related Information:
A Comment by JKSB with Item-wise Chart of New Duty/Tax - Details of key tariff revisions pertaining to motor vehicles and consumer electronics

Download : Sri Lanka_Customs_Tariff_Calculator.xls

Sri Lanka Customs Tariff Calculator by HS Code

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.