The re-structuring of import taxes on motor vehicles has had a minimum impact on the prices of cars, but van prices should come down considerably, figures compiled by vehicle importers’ association showed yesterday.
The association compiled the new tax rates under a single charge after President Mahinda Rajapaksa announced in his budget speech the abolition of a plethora of levies and replacing them with single tax.
Under the new system, small hybrid cars will be taxed at 57.5 percent of the CIF value, marginally down from the overall tax rate of 59.74 percent charge earlier.
President Rajapaksa said the new tax structure will earn an additional 5,000 million rupees for the government.
Gasoline powered small cars with an engine capacity of less than 1,000 cc will be taxed at 172.5 percent, down from an effective rate of 201.67 percent earlier. However, the minimum tax of 650,000 rupees applicable on each car means the duty reduction will have little impact on low-end Indian-made cars.
The biggest beneficiary, however, will be vans, with both diesel and gasoline powered vans now charged at 97.75 percent compared to 175.22 percent earlier. The tax cut on vans should see a new flood of these vehicles which were discouraged by the huge taxes in recent years.
The association compiled the new tax rates under a single charge after President Mahinda Rajapaksa announced in his budget speech the abolition of a plethora of levies and replacing them with single tax.
Under the new system, small hybrid cars will be taxed at 57.5 percent of the CIF value, marginally down from the overall tax rate of 59.74 percent charge earlier.
President Rajapaksa said the new tax structure will earn an additional 5,000 million rupees for the government.
Gasoline powered small cars with an engine capacity of less than 1,000 cc will be taxed at 172.5 percent, down from an effective rate of 201.67 percent earlier. However, the minimum tax of 650,000 rupees applicable on each car means the duty reduction will have little impact on low-end Indian-made cars.
The biggest beneficiary, however, will be vans, with both diesel and gasoline powered vans now charged at 97.75 percent compared to 175.22 percent earlier. The tax cut on vans should see a new flood of these vehicles which were discouraged by the huge taxes in recent years.
Price of a hearse should also come down with a generous tax reduction in this category of slow moving vehicles. A mid-range hearse should now attract a tax of 172 percent, down from 201.67 percent levied earlier. The government had last year removed taxes on modified sports cars used for racing.
Three wheel scooters have had their tax slightly changed in the current budget. The tax of trishaws go up from 119.76 percent to 120.75 percent.
Three wheel scooters have had their tax slightly changed in the current budget. The tax of trishaws go up from 119.76 percent to 120.75 percent.
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