Policy inconsistency creates uncertainty in the market
Slight impact for the high-end European vehicle importers
Finance Ministry reviews pros and cons of issuance of these permits
By Charumini de Silva
The Ceylon Motor Traders Association (CMTA) has handed over a written request to the Finance Ministry to reconsider the directive taken to stop the issuance of vehicle import permits to taxpayers.
“We handed over a written appeal to Finance Minister Ravi Karunanayake asking to at least consider the taxpayers who have already opened LCs as it would be unreasonable not to do so,” CMTA President Gihan Pilapitiya told Daily FT.
The Government made a condition stating that vehicles that are delivered before 31 October would not be affected by this directive.
“I think the Government should consider the fact that the vehicles that are imported under these permits are mostly high-end and hence most of them are sent according to customer preferences, which takes about three to four months,” he said
He pointed out that policy inconsistency had created uncertainty in the market, especially with regards to the duty regime.
The association has urged the Government to at least honour it with the people who have already opened the LCs before the directive was made because they are unable to pay the full duty and import these types of high-end vehicles.
When asked if there would be an impact on vehicle importers, Pilapitiya asserted that there would be no outright impact for the entire industry but a slight effect for high-end vehicle importers, especially those who import European brands such as Mercedes Benz, BMW, Audi and Land Rover.
The Government introduced this permit scheme to encourage voluntary tax compliance. The downside of it is that this becomes a business and some started misusing it with political influence, incurring heavy duty loss losses to the Government.
However, when contacted, Finance Ministry officials said that they had not cancelled the vehicle import permits but were reviewing the pros and cons over the issuance of these permits.