Heavy excise taxes a bane to motor industry-CMTA Chairman

M F Jabir

Heavy excise taxes have adversely affected the motor industry, said Tilak Gunasekera, Chairman, Ceylon Motor Traders’ Association addressing the CMTA AGM in Colombo recently.

“The Government increased excise duties on vehicles in March 2012 to discourage imports with the hope that this will curtail the widening trade deficit.

Tilak Gunasekera

Further, the rupee experienced a sharp decline following the decision taken by the Central Bank to stop intervening in the forex market and also imposed a credit ceiling on loans extended to the private sector, the cost of borrowing increased and fuel prices experienced a sharp rise. All these negative developments had an impact for vehicle business in the country from the second quarter of 2012. As a result of the revision in excise duties, vehicle registration for brand new motor vehicles reduced significantly by 25%,” he said.

Gunasekera said that around June 2012, the association was made to understand that there was a strong possibility that the Government was proposing to introduce Rs.50 million annual license fee to be charged from franchised vehicle importers.He said the membership of CMTA rallied round successfully to remove this proposal. He conveyed his appreciation to all the CEO’s and members of the Association for their support and co-operation extended.

He said the Association had submitted its proposals towards the Government’s 2013 Budget by suggesting ways and methods of how revenue could be generated to the Government through the motor industry. Explicit details on the proposals submitted were given in the Annual Report.

Last year the Association suggested and was successful to convince to Lanka IOC to introduce a superior version of petrol, Euro3 which was well accepted by motorists.

“With the success we had, the Association is now working with LIOC to bring in Euro 3 grade of diesel fuel. It is anticipated that this will be introduced into the market in the next couple of months,” he said.

“We had a very successful “Motor Show” that was held in June 2012. The large number of people visited the show was a testimony. I take this opportunity to thank all members of the Association for coming forward to participate at the event and made it a glittering event in the calendar of the CMTA. My appreciation to the Classic Car Club for partnering us.

It was brought to the attention of the Association that members were subject to difficulties, especially by the Police when moving their motor vehicles on promotional activities using garage number plates to other provinces and districts.

The Association has brought this to the attention of the Commissioner General of Motor Traffic to issue a notification to permit the free movement of such vehicles. Following up, with Commissioner I am told that he will be discussing this matter with the Traffic Police,” he said.

Gunasekera expressed hope that during the forthcoming year the Government would not saddle the motor industry further with more taxes.