Archive for the ‘Sri Lanka’ Category

State Worker’s Tax Discounts End In Sri Lanka

April 8, 2008

Sri Lanka has finished a scheme that gave tax-slashed cars to state workers from today and no new applications would be taken, the finance ministry said.

State workers who have been issued tax slashed import permits but have not opened letters of credit before the end of last month (March 31) would not be able to open letters of credit to import vehicles.

However the tax discounts would continue for buying a locally produced or assembled car.

State workers who have already applied and who qualify for the tax concession would be issued a permit to buy locally produced or assembled car, the finance ministry said in a statement.

Earlier reports said around 17,000 state-workers have applied to import tax-slashed cars.

Source-LBO.lk

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Sri Lanka Customs Revenue Takes Hit

March 20, 2008

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

Import Taxes Up in Sri Lanka

February 29, 2008

In a strange attempt to cut the trade deficit, the Sri Lanka government passed a new tax that equals out to 10% more over the already insane taxes equaling out to between 250 to 350 percent.

Sri Lanka has consistently have problems dealing with their trade balance as each year they import more than they export. To deal with the problem, they try to cut the amount of imports of the biggest category: cars. The problems with doing this include sky-rocketing prices for used cars. This is because Sri Lanka doesn’t produce any used cars, and if the government kinks the imports (by raising costs), demand go up and supply plummets.

Of course, the average person in Sri Lanka cannot afford a used (4-years old) Corolla that costs over $40,000. So what happens? The government indeed cuts off trade, but at the expense of it’s people. More sad days ahead for would-be consumers.