Sri Lanka Customs Revenue Takes Hit

Just last month, we reported how Sri Lanka raised import taxes by 10%. This month we are seeing the protest of importers have effect. Instead of raising revenue the government gets from imports, they actually get less.

In 2007, the Sri Lanka Customs made Rs.8 Billion less overall than expected. They expected Rs.283 Billion and only made Rs.275 Billion. While there was an overall increase, income from vehicle imports drop by Rs.11 Billion. They were expecting Rs.26 Billion from vehicle excise tax, but only got Rs.15 Billion.

There are a number of reasons for this. First, in 2006, nearly 70% of car imports were from Japan and this year it was only 46% that were mostly buses and vans. The other imports were coming from places such as China, India, and Korea. This other countries make and sell their cars cheaper, so as a result, that means less income for Sri Lanka.

The second reason for less revenue, is because many car imports are being imported by civil servants which get duty free import permits. As people know, Sri Lanka has among the highest duty rates so getting duty free permits really help imports and really reduce import revenue.

This is not the end of this. If import duties continue to stay high, they can continue to expect less revenue. One official says while the revenue target from motor vehicle imports for 2008 is estimated at Rs. 35 Billion, it will be difficult to make even 40% of that estimate. Hopefully, we can see a change of heart and a drop in the super high import taxing.

For more information on importing into Sri Lanka, visit:
Japanese Used Car Exporting.Info – Importing Help For Sri Lanka

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