Increase in cost of vehicles -- carbon tax from 2019

Increase in cost of vehicles -- carbon tax from 2019

Secretary of Sri Lanka Vehicle Importers Association Mr. Kirthi Gunawardena suspects that taxes imposed by the next budget will be further increased. Though representatives of vehicle importers' associations were invited to the Ministry of Finance every year before this before the budget was prepared, this time of course no such opportunity has been extended he says and addas that the market has dropped on a large scale and costs related to importing vehicles have

skyrocketed than before as a result of the rupee dropping in relation to the American dollar and the Japanese Yen too has changed to Rs. 1.75 .

Kirthi Gunawardena further explained that in the instance of placing orders for vehicles the fees levied in that connection being doubled has resulted in the industry collapsing this way. He further mentioned that the vehicle importers' tax would double with the budget expected to be brought to parliament this March. He said that the Finance Ministry did not give an opportunity to their associations for the first time, perhaps because no concessions are extended to them.

In the meantime, the Motor Traffic Commissioner has said that a carbon tax will be enforced from January 1st this year. Exempting electric vehicles, the carbon tax will be imposed on all other vehicles. A tax will be charged 25 cents on each cubic metre from every vehicle manufactured under five years while a rate of cents 50 will be charged astax per every cubic metre for vehicles between five - 10 years. The Traffic Commissioner General has stated that when applying for the income tax licence by the vehicle owner, this carbon tax has to e paid in the case of vehicles of vehicles of five - ten years.

Though the carbon tax will be enforced from January this year, Traffic Commissioner General Mr. Jagath Chandrasiri has no action will be taken against vehicle owners who during this year. However, he also said that although this law will come into force from next year in relation to carbon tax, the payment can be made without being subjected to any tax this year as such.