Treasury to convene meeting of all motor importers

  Published : 3:00 am  May 3, 2012  |  1,287 views  |  3 comments  |  Print This Post   |  E-mail to friend

New licensing scheme to be discussed to reach an understanding

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The Finance Ministry will shortly convene a meeting of all motor vehicle importers to discuss a new scheme to improve service standards and reliability.
Ministry Secretary Dr. P.B. Jayasundera told journalists on Monday that the new meeting was a follow up to a discussion President Mahinda Rajapaksa who is also the Finance Minister had with Vehicle Importers Association recently.

“We will meet with all importers to discuss the modalities for a licensing arrangement to ensure after-sales service standards as well as reliability of vehicles sold,” Dr. Jayasundera said.
He explained that during the meeting with the President, it was pointed out that within the motor trade there are several unorganised importers who remain in business despite supplying vehicles of poor quality and reliability, jeopardising the interest of motorists or customers.  A scheme has been proposed to issue licences for the purpose of vehicle imports ranging from a Rs. 5 million fee for small scale importers of reconditioned vehicles and Rs. 10 million for large-scale firms as well as Rs. 25 million for those who import brand new cars.
“The proposed meeting is aimed at getting view points of all motor industry stakeholders and reach an understanding on the way forward,” Dr. Jayasundera added.
The Treasury Chief also said that following the 1 April hike in duties, the value of vehicle imports this year is likely to come down to $ 700 million from a record high of $ 1.7 billion last year.

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3 Responses to “Treasury to convene meeting of all motor importers”

  1. Perera on May 3rd, 2012 9:15 am

    This is really kidding, the government trying to help only few ( 3 or 4 importers ) to maintain a monoply in Sri Lanka. These very people has met President and Dr.P.B.J on 17th April has asked this license fee to be paid, They call them selves officials of vehicle importers association ( only very few , can name if needed ), another bunch of people call them selves Vehicle Importers Association ( same name , same logo ), The imposition of license fee would create many reasons , mainly , only allow big people to surivive and small people to leave the industry , secondaly , this would incrase the prices so high on top recently increased taxes , this would create monopoly situation among 3 to 4 people . These big people want small people out and control the whole market , I can’t understand why the finance ministry turns blind eye on this crystal clear issue . The car prices went from 1,000,000 up words ( for small 1,000 cc very popular very economical Japanese used car up be nearly 1,100,000 Rs ) , next most common Japanese used car Toyota Axio or Allion increased by 1,500,000 Rs , apart from these unbelivable tax hikes, the Yen rate goes sky high than never before , so the car prices are now uncontrollable . everyone may agree if the car imporrts were stopped or restricted under reasonable grounds in order to better address to ever worsening BoP crisis , we are totally with the government if the car imports were stopped for short period till the economy is rebuilt , but here government is mislead by few people and trying to create monopoly situation . This government is called People Friendly Government according to the MAHINDA CHINTANA , but the government tries to hit at very people neglecting their own vision not for the betterment of government or majoritty but for the benifits for 3 or 4 people ( can name at any time ) .

    In this letter , Dr.P.B.J has quoted about the Unorganized importers , If your good self could tell us any such importer in the next meeting , highly appreciated , Mal practices may be from big or small , but never be a unsolvable problem . The brand new companies give one year or 6 months guarantee period or fixed number of kilo meters whichever comes first , the same guarantee is offered by the small or big importers since the Japanese cars can be guaranteed even for 3 to 4 years as only the engine and transmission system is never brakable within such a short time . So this reason will be nullified on berth itself.

    It was reported that garage / spare parts facilties are going to be must , why ? again this is to eliminate small people . Spare parts are needed after sales for brand new cars as they are the authorized agents. Eg. if Chinese cars are imported , the importer must be responsible for spare parts as long as car is running, but when Used Japanese cars are importered , no such problem comes as the Brand new companies import any parts for any Japanese vehicles irrespective of who imports them as the selling spare parts is part of their business . In frank speaking, no brand new vehicle imports asked president or Dr.P.B.J to impose such license fee , they who asked and why asked ? it is crystal clear why and who asked . What would then small importers be supposed to do ? would they have to work under big companies ? then what would minor staff of small comapnies do ? will they eat cianide capsuls ?

    At last , we are fully agreeable if the imports was stopped completely or restricted under reasonable grounds until the BoP cricis is little solved . The people friendly president and well educated Dr.P.B.J should be made aware these irregularaties .

    As a small but very old importer, I propose the treasury to impose license fee for each and every vehicle to be imported . Eg. 50,000 Rs import license fee should be paid at the time of L/c is established . if anyone 10 units were imported annualy , the license feee 500,000 Rs , if 100 units were imported , the license fee 5 M Rs and so on, This is very reasonable in terms of small or big people as well as government who earns revenue . I am sure the government would opt this option as they get big revenue but the big importers never agree as their prime intention is to eliminate small people and maintain used Japanese car monopoly.

    Frankly , almost many importers ( mainly small who doesn’t have early imported vehicles ) are about to loose Millions of money due to recent tax hike on 31st March, So at least if they are allowed a time frame to recover themselves and leave the industry , they must be pleased I beleive. In Sinhalese, MEKA HARIYATA GAHEN WATUN EKATA GONA ANNA WAGEI .

    It is up the people friendly government and people’s president to settle this issue in order to treay equally to all stake holders.

  2. CarBoy on May 3rd, 2012 9:42 am

    When meeting with the president, they put forward 2 demands; 1. To relax age restriction, and 2. To issue a license to car importers restricting individuals importing vehicles.
    The car dream: Does any one of these represent the actual problem here?
    The grave problem here is that there are thousands of importers (yes, there are thousands of individual importers alone) who had ordered vehicles, letter of credit established and even vehicles shipped from Japan before March 31. That is before the government changed the import rules and increased duty.

    Nightmare million problem: They wake up on March 31st and finds that they are short of cash to pay for duty – not just a little amount but in millions. Approximate extra amounts they have to pay; For A 1000 cc Toyota Vitz SLR 1.27 million, for a Toyota Axio SLR 1.75 million, for a 1300 cc Toyota Belta SLR 1.5 million and for a KDH200 Hiace SLR 1 million. How can any individual come up with millions of rupees over night? Or may be over a week or within a month unless they do something unlawful to raise money.

    Troubled market – big profits: Vehicle importers association did not raise this problem properly in the discussion with the president – Why??
    A fact remain that companies of top office bearers of this association were having many vehicles in stock and what they had imported was very little compared to what they usually import. Now, we already know that they have already increased the prices of vehicles in stock which they had imported under old duty structure:

    Way to monopoly: They also had proposed a license to car importers after receiving a deposit with government. SLR 5 million deposit for those who import less than 100 units per year and 10 million for more than 100 units. Simply, this is the easy way to monopoly. This even violates fundamental rights and against open economic market policies.

    Total grip: Only very few people know that these office bearers have their own companies to supply vehicles in Japan. If this license matter is imposed, these people have a strong grip over the used vehicles import business in Sri Lanka.

  3. Perera on May 3rd, 2012 1:40 pm

    Dear respected sir,
    you have said that H.E president had a meeting with Motor Vehicle Importers Association and they areed with this proposal . In frank speaking , these few people don’t represent the industry , they are just few big , very big importers , close to brand new level, they need to maintain a monopoly in the industry,

    There is another association under the same name and same logo, they claim that they are the sole representatives , we don’t mind any number associations if they are working betterment of majority as well as final consumers . Sir, pl go through both associations and take a decision which favors to majority , keeping even a secret or open ballot .

    We are fully agreeable about BoP crisis and the economic reccission in Sri lanka. so if the government decided to stop imports or curtail, we have no objection but on the reasonable grounds giving equal treatment to all stake holders.

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