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Message: <blockquote data-quote="lkdood" data-source="post: 6927393" data-attributes="member: 92282">Sri Lanka's taxes on motor vehicles are 'prohibitive'  and are discouraging imports and government revenues, the finance  ministry has said in a report, echoing the view of the motor vehicle  trade.The finance  ministry in a report issued under country's fiscal responsibility law in  February said excise taxes on motor vehicles alone which had been 18  percent of the total in 2007 had fallen to 3 percent by 2009.   In 2007, the government had raised 17.4 billion rupees in motor vehicle  excise duties. In 2008 car excise had fallen to 11.06 billion rupees and  in 2009 to 3.25 billion rupees.   Sri Lanka's ordinary citizens pay high rates of taxes on imported motors  cars amounting to over 200 percent in some cases, in the form of  excise, import duty, value added and an assortment of other charges.  In November 2007 Sri Lanka had registered 26,100 new vehicles including  2,300 motor cars. In November 2008 only 20,500 vehicles were registered  and car registrations had fallen to 965.   In November 2009 vehicle registrations had stabilized at 19,300 but cars  had plummeted further to 329.  In 2008, state workers were given tax slashed cars, relegating ordinary  people outside the state to second class citizens in a bizarre apartheid  style move for a modern democracy. Lawmakers are routinely given  tax-free cars.  Discriminatory taxation against the common people has become a feature  of independent Sri Lanka with state workers and politicians also  exempted from income tax.  The finance ministry said in late 2008 imports were further discouraged  when the Central Bank imposed high deposit margins on letter of credits  used for car imports in the middle of a balance of payments crisis.                                    Though  the margins were later dropped imports did not pick up due to a  slowdown in economic activities and "still high taxation", the finance  ministry report said.  At the moment tax arbitrage is also taking place through local  assemblers causing further revenue losses to the state.  The motor trade had been calling for reduction in import duties to make  cars more affordable.   <a href="http://www.lankabusinessonline.com/fullstory.php?nid=1605760899" target="_blank">LBO</a>                              </blockquote>

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