New policy for duty free vehicles for Government servants

Tuesday, 20 June 2017 00:06 - - {{hitsCtrl.values.hits}}

The Government has appointed a new committee to devise a policy to import vehicles under duty free permits for the use of politicians and state sector employees, State Minister for Finance Eran Wickramaratne said yesterday.

“This has been subjected to so much debate and a lot of criticism drawing in issues of bringing supplementary budgets to finance the purchases. So we have appointed a committee to investigate the situation and formulate a proper policy,” he said.

According to him this will enable greater transparency as percentages of tax concessions will also be included in the policy.

“We are also exploring to establish the most cost-effective and acceptable way to import the vehicles,” he said.

However, the circular issued by the Trade and Investment Policy Department of the Finance Ministry for senior executives in management and administration at state institutions and state cooperatives had increased the tax concessions.

The Trade Agreement Policy Circular No.01/2016 dated 14 July 2016 governs the import of vehicles for senior executives in management and administration at state institutions and state cooperatives.

The new circular categorises vehicles eligible to be imported under two groups based on the C.I.F. value, unlike the previous year’s single category which gave duty waivers for vehicles with a C.I.F. value of $ 30,000.

Under Category 01, vehicles imported or purchased locally with the permit, with a C.I.F. value of less than $25000, the tax concession has been increased to 65% from 50% in the previous year. Category 02, vehicles with a C.I.F. value between $ 25,000 and $ 30,000, the tax concession has been increased to 60% from 50%.

Under new regulations Category 01 vehicles are not transferable for five years, while this rule has been relaxed for Category 02 vehicles, making it transferable at any time.