Taxes reduced further for car imports to Sri Lanka

Contradictory to all industry expectations, and comments made by members handling policies, the taxes have been revised further to the astonishment of many.  While definitely good for car buyers, i am sure many who brought cars recently, or were waiting to sell and buy new would be a bit disturbed by the massive changes.

The only link i have found for now is http://lbo.lk/fullstory.php?nid=349762860

Based on this the reduction in prices will come from

1. Reduction in VAT from 20% to 12%

2. Aging/depreciation percentages have been increased that means less tax.  E.g. 3-3.5 year was 75%, now its 55%, 2-3 years was 80%, now its 60%.

3. Social responsibility levy(SRL) of 2% has been removed

4. Nation building tax (NBT) reduced by 1%

5. Regional infrastructure development (RDL) of 5% removed

However excise duties have been increased, details of which have not been mentioned (one mention being that it had been doubled), would be nice to see as this might level out any benefits from the VAT and aging/depreciation.   In the case the excise duty has been doubled, then even with the VAT and aging, prices potentially could go up for some cars!

But the big saving comes for hybrids and electric cars where the following exceptions are given it seems,

1. No VAT, so that means compared to old taxes its a 20% decrease in taxes, and compared to other cars 12% less in the revised taxing

2. Excise duty is not null for all it seems.  Its null for some, and reduced depending on the category, precise impact maybe model based.  The drop categories stated say 30 to 15%, 15, 15 to 5% and 5 to 0%.  We will need to wait for a more definitive tables to see how this gets applicable.

So looks like hybrid cars such as Honda Civic Hybrid, Toyota Prius, Toyota Harrier Hybrid, Honda Fit Hybrid etc are going to be hot cars.

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2 thoughts on “Taxes reduced further for car imports to Sri Lanka”

  1. Hi Bobby,
    It’s really nice to see you blog about a totally different field! Cars and gadgets are of course one of my favorite topics too! Seems you have a broad knowledge on everything in the world 🙂
    That’s great.
    Sachintha.

    1. he he.. i like my hobbies.. and cars well thats an addiction since young days, sadly no budget to buy proper fast cars 🙂

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