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Message: <blockquote data-quote="B2$pirit" data-source="post: 15434499" data-attributes="member: 7336"><a href="http://www.sundaytimes.lk/130811/business-times/tax-hike-for-special-permit-vehicle-imports-56152.html" target="_blank">http://www.sundaytimes.lk/130811/business-times/tax-hike-for-special-permit-vehicle-imports-56152.html</a>Tax hike for special permit vehicle importsBy Bandula SirimannaView(s): 1614In a desperate move to increase revenue, Sri Lanka’s cash strapped government has increased the customs duty payable for the importation of vehicles under duty slashed permits issued to senior public sector officials.The Ministry of Finance has issued a new circular in terms of trade tariff and investment policy on the 2nd of August cancelling all previous circulars while completely revising the percentage of taxes on customs value (CIF basis).According to the new circular the duty payable for the importation of vehicles with cylinder capacity of 1000 cc and 1600 cc has been increased by 15 per cent while a 30 per cent duty hike has been imposed on luxury cars with cylinder capacities of 1600 cc , 2000 cc , 2600 cc and 25 percent on over 2600 cc, respectively.A senior Finance Ministry official said that the Cost, Insurance and Freight (CIF) value of the vehicle, under this scheme, should be US$ 25,000 and it could be exceeded only up to $5000 and reaching a maximum of $30,000.Senior public sector officials who are interested in buying vehicles using the duty slashed vehicle permit facility are now finding it difficult to bear the cost as a result of the duty increase, several government officials complained.They noted that the move to tax them more for a vehicle after serving in public sector institutions for over six years is unreasonable as politicians are still enjoying duty free vehicle permits.Since the mid-1980s Sri Lanka has given completely tax free cars to elected representatives of the people and tax slashed cars to state workers while taxing ordinary citizens to very high levels, in a perverse just system.A spokesman of Lekhraj Automobiles (PVT) Ltd told the Business Times that most of the super luxury vehicles imported under this permit scheme are Montero Sport, KIA/Hyundai SUV, BMW X 1, X 3, 520D and Audi A4 and A6.Following the increase in CIF value of permits from the earlier $25,000 to $30,000 super luxury vehicles such as the Audi A6 and BMW X 5 now comes under this category.He revealed that an additional penal rate is imposed on permit holders when purchasing such super luxury vehicles.Officials said that honest state workers who are genuinely interested in buying a vehicle will be affected by the government’s latest move adding that the importation of vehicles using this facility will also come down reducing much need revenue for the government.The tax permits have been a major channel of revenue leakages. When the state increases taxes on cars for ordinary citizens, many turn to the permits, undermining state revenue.</blockquote>

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