Vehicle import duty reduction hailed

Win-win situation for Government and importers:

Channa BANDARA WIJEKOON

Local vehicle importers hailed the Government’s decision to reduce excise duty on motor vehicles by 50 percent which will boost vehicle imports significantly.

DIMO Chairman /CEO Ranjith Pandithage	Colonial Motors CEO Mohan Ratnayake

The Daily News spoke to some vehicle importers to seek their views. While some of the importers said increase in taxes for motorcycles is detrimental, some said it is a good move to control heavy volumes of motorcycles being imported to the country.

We see this move as a very positive one and once we get down new consignments we will be able to sell them at lower prices, Ceylon Motor Traders Association Chairperson, Zeeniya Rasheed said.

She also expressed her views on the available stocks for which duty is already paid and said, companies will have to workout formulas to strike a balance as regards price to sell these stocks.

Companies could have different strategies to remedy this, she said.

“With this move, the volume of vehicle imports will definitely increase. The market will grow and we will also have to look at means of disposing vehicles, which are already duty paid, AMW Senior General Manager Sales and Marketing Shivantha de Zoysa said.

Welcoming the Governments move, Colonial Motors PLC CEO Mohan Ratnayake said this tax concession is part and parcel with the dawn of peace in the country.

“The Government would have looked at passing down the benefit to the public, which will in tern earn more revenue to the Government by way of taxes as more volume of vehicles will be imported now. The Government has created a win-win situation with this move.

He said, the Government should do away with duty free permits as a few middlemen are making money by selling those.

With these tax concessions the need of doing away with middlemen and duty free permits has come to the surface, Ratnayake said.

The prices of TATA range of vehicles will come down and customers will benefit. The biggest impact will be on 1600CC passenger vehicles and diesel vans.

Since we do not keep stocks, the question of having already duty paid imported vehicles in stocks does not arise DIMO Chairman /CEO Ranjith Pandithge said.

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[Chamber welcomes tariff simplification]

The Ceylon Chamber of Commerce has welcomed proposed simplification of the tax structure from June 1.

The Government has announced several changes to the import tax regime from June 1.

These include the reduction in the number of tariff bands, reduction in import duties, removal of the 15 percent surcharge on import duty and removal of taxes such as the VAT and Cess on some of the items.

The Chamber recognizes this initiative to reduce import taxes as a first step in the simplification of the taxation system and applauds the Government for moving in the right direction.

The removal of import duty on raw materials and plant and machinery is well-timed. When the country is at a new economic juncture poising itself for accelerated growth, the reduction in duty on plant and machinery will be a further encouragement for investment.

Rather than providing tax incentives and distorting the tax system the Chamber sees this as a positive step to promote investments.

Similarly the reduction in raw materials will benefit the local industries. Once again instead of imposing additional taxes to protect domestic industries, removal of tariffs on raw materials will reduce cost of production for domestic industries and enhance their competitiveness.

Reduction in import duty on motor vehicles and on some of the consumer durables have been strongly advocated by these sectors. Lower prices will help consumers to access better quality goods.

The Chamber called its members and the private sector to take advantage of the measures introduced by the Government and enhance investments in value adding sectors to take the country to a higher growth path.

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