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09 May, 2014 | 9:19 pm
The Sri Lanka Vehicle Importers Association says they are faced with numerous obstacles when importing vehicles to the country as a result of the budget proposals
Speaking at a press conference in Colombo on Saturday evening, Chairman of the Association Mahinda Sarathchandra said that budget proposals have created an environment where it is more cost efficient to purchase a brand new vehicle than a used vehicle.
The 2014 budget proposed that the depreciation schedule for used motor vehicles be revised. According to the earlier depreciation schedule for used vehicles, the depreciated FOB value for six months after production stood at 90%, however this value continued to decrease every six months.
However, according to the new depreciation schedule proposed through the 2014 budget, a 90% depreciated FOB value is applicable for vehicles with a production date over one year and less than two years.
Mahinda Sarathchandra, Chairman – Lanka Vehicle Importers’ Association
“If you import a two year old vehicle then you will have to pay the same cost that you will have to incur when importing a new one. Then the sale of used motor vehicles will drop and consumers will have to buy brand new vehicles. The public will have to pay a tax of between Rs.200,000 and Rs 1.4 million for a vehicle which had been used for around two, three, five or six months.
The association points out that only a limited amount of people would benefit from the new regulations which make it more profitable to import brand new vehicles ..
Mahinda Sarathchandra further stated:
“Through this they have created the market necessary for about twelve companies that deal with brand new vehicles. We call on the officials to change the depreciation schedule, if not we won’t be able to maintain our businesses and many people will be left unemployed.”
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