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Tsunami of 1000cc vehicle imports after new tax formula: Mangala

After introducing of a new formula to calculate the import taxes on vehicles based on their engine capacity, importing of motor vehicles less than 1000cc was becoming a Tsunami to the country, Finance Minister Mangala Samaraweera said.

The new tax structure on vehicles was introduced under the Budget-
2018 proposed by Minister Mangala Samaraweera has been revealed by the Finance Ministry. The calculation of Excise Duty on vehicles on the basis of Cost, Insurance and Freight (CIF) value was removed.

“According to received records, 45000 vehicles with 1000cc engine capacity were imported from January to May. Each month about 4500 vehicles have been imported. At least one thousand 1000cc vans have been imported each month,” the Minister said.

Speaking to the media at a press briefing at the Finance Ministry yesterday he said, with the new tax structure, it would be a huge relief for the people and after amending the structure, loss to the government have increased.

Due to a large number of vehicles imported to the country, it might have made a big impact to the depreciation of the SL rupee against the US dollar leaves valuable foreign exchange under pressure, Minister Samaraweera said.

Following the request of the Central Bank, the decision was taken after holding several rounds of discussions.

During the Rajapaksa regime in 2014, 150% tax was imposed on motor vehicles with engine capacity less than 1000cc.

“People had paid Rs. 1.65 million for a Wagon R during the former regime but with the new tax amendments, people have to pay only Rs.1.25million which is far lesser than 2014 taxation,” he said. (Chaturanga Samarawickrama)