By Hiran H.Senewiratne
Speedily appreciating major foreign currencies against the dollar are likely to push up the prices of imported motor vehicles by around Rs. 500,000 to 1.2 million each unit, Motor Vehicle Importers’ Association of Sri Lanka chairman Indika Merenchige said.
"The US dollar is deprecating in Japan resulting in the price of a Japanese Yen increasing. Therefore, the unit cost of a car would increase by between Rs 500,000 to Rs 1.2 million because the Yen price is moving up against the US dollar in Japan, which is a big price to pay for the Sri Lanka customers, Merenchige told The Business Financial Review.
He said for each vehicle with the Customs from November 20, 2015 to date, a charge of around Rs. 70,000 has to be paid. Similarly, following President Maithripala Sirisena’s statements most expected that they would be able to buy vehicles at lower prices.
"However, the President’s decision was for a very limited group, Merenchige said.
After releasing the vehicles from Customs under the earlier system, the vehicle had to be registered under the name of the person who had opened the Letter of Credit. This registration is under the condition that this vehicle would not be transferred to any other for a period of five years, he said.
"The government has the right to increase levies. We cannot exert any pressure on that. However, our association believes that it is the duty of the government to protect the country’s entrepreneurs, he added further.
Hence, the association requests future buyers to purchase their motor vehicles as soon as possible, he added.
When looking at the budget proposal, it seems everything is all right, but new taxation, the valuation system and the depreciation on currency will jack up the price of vehicles at very high levels, Merenchige said.
He said that the tax on hybrid vehicles has been increased to 10 per cent and electric cars to 50 per cent from 5 per cent. This will result in an increase for electric cars by Rs.2 million, he added. Motor traders will have to pay an additional fee of Rs.15,000 for each unit when opening Letters of Credit to import vehicles, he added.
Prices of small cars, including Marutis, will also go up due to the introduction of a vehicle import fee to obtain a Vehicle Entitlement Certificate for each vehicle.
The Vehicle Importers’ Association of Sri Lanka had made a proposal some time back to the Finance Minister to support them to shift their business to African countries by devising a clear-cut policy towards this end, he said.
The Association has made a suggestion to appoint a high powered committee comprising representatives of the Treasury, Sri Lanka Customs, Motor Traffic Department, Exchange Control Department and motor traders associations to devise a re-export policy for used and old vehicles, Merenchige added.
"The US dollar is deprecating in Japan resulting in the price of a Japanese Yen increasing. Therefore, the unit cost of a car would increase by between Rs 500,000 to Rs 1.2 million because the Yen price is moving up against the US dollar in Japan, which is a big price to pay for the Sri Lanka customers, Merenchige told The Business Financial Review.
He said for each vehicle with the Customs from November 20, 2015 to date, a charge of around Rs. 70,000 has to be paid. Similarly, following President Maithripala Sirisena’s statements most expected that they would be able to buy vehicles at lower prices.
"However, the President’s decision was for a very limited group, Merenchige said.
After releasing the vehicles from Customs under the earlier system, the vehicle had to be registered under the name of the person who had opened the Letter of Credit. This registration is under the condition that this vehicle would not be transferred to any other for a period of five years, he said.
"The government has the right to increase levies. We cannot exert any pressure on that. However, our association believes that it is the duty of the government to protect the country’s entrepreneurs, he added further.
Hence, the association requests future buyers to purchase their motor vehicles as soon as possible, he added.
When looking at the budget proposal, it seems everything is all right, but new taxation, the valuation system and the depreciation on currency will jack up the price of vehicles at very high levels, Merenchige said.
He said that the tax on hybrid vehicles has been increased to 10 per cent and electric cars to 50 per cent from 5 per cent. This will result in an increase for electric cars by Rs.2 million, he added. Motor traders will have to pay an additional fee of Rs.15,000 for each unit when opening Letters of Credit to import vehicles, he added.
Prices of small cars, including Marutis, will also go up due to the introduction of a vehicle import fee to obtain a Vehicle Entitlement Certificate for each vehicle.
The Vehicle Importers’ Association of Sri Lanka had made a proposal some time back to the Finance Minister to support them to shift their business to African countries by devising a clear-cut policy towards this end, he said.
The Association has made a suggestion to appoint a high powered committee comprising representatives of the Treasury, Sri Lanka Customs, Motor Traffic Department, Exchange Control Department and motor traders associations to devise a re-export policy for used and old vehicles, Merenchige added.
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