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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Import tax makes vehicles unaffordable for middle class

Import tax makes vehicles unaffordable for middle class

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Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
The government’s decision to maintain a 200% tax on vehicle imports represents a policy failure in terms of meeting the needs of middle-income citizens seeking to affordably purchase a vehicle, according to Co-President of the Vehicle Importers Association of Lanka (VIAL), K. Deekiriwewa.

“Trying to save foreign exchange is only one aspect of this issue. Sales of cars have dropped by as much as 80% as a result of the government using the maximum duty possible and this has put the idea of owning a vehicle completely out of reach to the average citizen.”

“The government must understand that if they need to conserve foreign exchange there are other more balanced means of doing so. They must look at this issue from a broader perspective. As traders we always have the option of doing the same business elsewhere or diversifying into other fields. Besides the fact that our business cannot survive like this, the general public simply cannot afford to purchase a vehicle of good quality at a reasonable price any longer and that is something the government has to answer for., Deekiriwewa said.

Whilst requests made from VIAL to lower duties were disregarded by the government in Budget 2013, a further 85% tax, or Rs.75,000 fee was added to motor cars under 1,000 cc, a segment which had enjoyed strong sales prior to the duty increases.

Car imports by the end of October plunged by 70% from its peak, according to information analyzed by JB Securities (Pvt) Ltd, following a fiscal tightening package aimed at curbing imports at the start of this year.

Notably, 40 new registrations of BMW 520D vehicles also took place last month, many of which were reportedly purchased through the utilization of duty free permits. In total, 93 luxury cars, across the brands BMW, Mercedes Benz and Audi were purchased in October alone.
http://www.dailymirror.lk/business/economy/23406-import-tax-makes-vehicles-unaffordable-for-middle-class-.html

aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I don't know why people complain about these things, those small cars are very uncomfortable, can't go over 160 easily. They look ridiculous when all the glasses are tinted all black. It's good government has increased tax on those worthless cars to prevent bad cars getting into the roads. At least there're 93 great people in Sri Lanka who know what's good for them. Why not buy a BMW like those intelligent people than complain, suckers.

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@aj wrote:I don't know why people complain about these things, those small cars are very uncomfortable, can't go over 160 easily. They look ridiculous when all the glasses are tinted all black. It's good government has increased tax on those worthless cars to prevent bad cars getting into the roads. At least there're 93 great people in Sri Lanka who know what's good for them. Why not buy a BMW like those intelligent people than complain, suckers.

Why are you bothered? You are not a Sri-Lankan and you don't live in Sri-Lanka, so why don't you go down to the ship's hold and enjoy the boat ride. You should worry about filling up the asylum application.
Sri-Lankans don't need small cars, we''ll work on importing race cars.

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Racing car is a small negligible factor. Micro sighed an agreement with foreign car manufacturer . So it is one good factor.

http://www.asiantribune.com/news/2012/10/26/fortune-500-car-manufacturer-enters-sri-lanka-first-time

This hike is to release the pressure on BOP and gov. Never get an additional tax from these. Instead Gov. Rev. will come down further but they did this hike to reduce the $ requirement.
If not we have OIL which will hit but this is one of the best approach to take at this level.

If any body can give another solution plz share.

I will never buy a car with 200% tax which will increase ur Lease and ultimately you have taken a loan to pay tax.

I will go for micro or at least for a very old car like WB.............

Basketball

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
http://forum.srilankaequity.com/t17188p50-where-are-ethics-social-justicewith-this-rude-tax-increment-on-vehicle#145214

This AJ fellow is not answering my post.What to do.

HE is a hero to him.
AJ if u want encourage people in sri lanka. Dont be a sucker like this who has no respect.

Acc. to the way you write U cant be a foreigner for sure.

Any way all the best.
Please ans. my previous post Which i hv given u the link. If my norm is wrong i always free to change my mind. I need a rational answer.

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Well AJ used to be a good boy earlier bur now Aj is playing an ajenda..

lol!

Sometimes this happens when SL's go abroad and find that they can afford luxury for a mere cheap price than in SL.. Wink

Light of Hope


Vice President - Equity Analytics
Vice President - Equity Analytics
Amal Mudunkotuwa wrote:Racing car is a small negligible factor. Micro sighed an agreement with foreign car manufacturer . So it is one good factor.

http://www.asiantribune.com/news/2012/10/26/fortune-500-car-manufacturer-enters-sri-lanka-first-time

This hike is to release the pressure on BOP and gov. Never get an additional tax from these. Instead Gov. Rev. will come down further but they did this hike to reduce the $ requirement.
If not we have OIL which will hit but this is one of the best approach to take at this level.

If any body can give another solution plz share.

I will never buy a car with 200% tax which will increase ur Lease and ultimately you have taken a loan to pay tax.

I will go for micro or at least for a very old car like WB.............

Basketball

and who holds micro shares?

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Only a power full investor/person can start a company like micro. It is quite Capital intensive.

Actually who holds. Raja family ? hope yes.

Any way We need to promote sri lankan brands to reduce the BOP heat. These days even Japan cant tolerate their trade account deficit. So wt about SL..................?

But I dont kw the quality of micro yet.Rumors says it is not that good...................

gamaya


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Some intelligent governments have gone to strategic alliances with big motor car companies to make use of the countries labour market and more importantly as a technology transfer mechanism.

So far this miracle has not happened here.

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@gamaya wrote:Some intelligent governments have gone to strategic alliances with big motor car companies to make use of the countries labour market and more importantly as a technology transfer mechanism.

So far this miracle has not happened here.

Our car market is not big for big motor car companies (compare against Malaysia, Indonesia, Thailand, India all above 60million population), building here and exporting is also not cost effective and compared to other countries our labor force is relatively expensive, lazy and prone to strikes at the drop of a hat. What big car manufacturer would want to come here and get caught to a jeppa strike.

So it's not a case of government not being inteligent, it's a case of the big car manufacturers being intelligent enough not to come to Sri-Lanka (at least right now)

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Jiggysaurus wrote:
@gamaya wrote:Some intelligent governments have gone to strategic alliances with big motor car companies to make use of the countries labour market and more importantly as a technology transfer mechanism.

So far this miracle has not happened here.

Our car market is not big for big motor car companies (compare against Malaysia, Indonesia, Thailand, India all above 60million population), building here and exporting is also not cost effective and compared to other countries our labor force is relatively expensive, lazy and prone to strikes at the drop of a hat. What big car manufacturer would want to come here and get caught to a jeppa strike.

So it's not a case of government not being inteligent, it's a case of the big car manufacturers being intelligent enough not to come to Sri-Lanka (at least right now)

Yeah our labour is expensive than Indian labour so no wonder if they attract this market.

These Indians are a shame for the labour force. They would even take up jobs so cheap and live in shanties having one meal a day if they have to.. When these ppl get into big companies, i.e. MNCs, they would eventually try ways to cut costs by even demising his colleague's job role and please the mgmt. Then they'll try to reduce costs further by giving lowest increments to their subordinates. And the other thing is; quality wise their cheap too.. Work is soo messy for an neat person's nature Wink

For big motor companies to come to SL and open up factories would mean the government to ease many strict policies. But sometimes it would be ideal looking at the job market it can create. But who would take the initiative and launch the discussion if they dont get a cut these days? Twisted Evil

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
1) Then what u says is Geely International Corporation ( Fortune 500 )is not intelligent.

2) can you name a sri lankan private company which halt their production due to a protest for more than One week. ( BOI Project )

3) How about Chinese protest over Japan companies last month. Which still continues and will waved off No. of japan businesses from China and vise verse.

So who are more crazy ???? Chinese or Japan Or Sri lanka.

And also Malaysia had only 28m Population ( 2011 ) if i am not mistaken.

Any way ..........

It is not that easy to ask them to come over here. Lot of companies already entered in to the property sector after 2009. It is a good move and shows the trust. If some body want those things to happen with in 1-3 year will never materialize.

Since we have only 20m population we cant be categorized as a low cost labour country in the future. That will be done by China and India for so many years................

Thanks

Universalgoal


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
i use early fb14 sold and turned to micro panda with the tax increase , now 1 and 1/2 year running excellent, and i feel better than fb14 , if any one want advice on panda car pm me cheers so no worries average people have a choice (i got rid of Japan mania which i had early )

1) Now You have to spend more than 3m to get a Japanese Car
you can buy Panda with all the options at 1.6m around

After Sales
2) you get 100,000km warranty
3) you get 3year warranty
4) and they replace what ever abnormal part immediately
5) at Kalaniya service center you get excellent service
6) at kalaniya service center they have the facility of 100cars to repair and service
7) and they use modern technology to serve the customers
Cool and if your car stall where ever car carrier come and lift to the service center free of charge (withing the warranty time)

pls note that this is not a promotion

this will help you to get an idea about a car and specially who are suffering from tax and Japanese mania

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Amal Mudunkotuwa wrote:

2) can you name a sri lankan private company which halt their production due to a protest for more than One week. ( BOI Project )


Here's instances of one publicly listed company getting hammered by strikes
August 2010
http://www.sundaytimes.lk/100815/BusinessTimes/bt07.html
September 2011
http://www.lankabusinessonline.com/fullstory.php?nid=682308416
December 2011
http://www.ft.lk/2011/12/06/lanka-floor-tiles-sorting-department-employees-strike/

The above results were from one google search for one company. So imagine how many more man hours would have been lost in the overall economy.

Our labor force (at this time) is not going to work for 18 hours a day because unfortunately we expect things to be given for free by the govt. People make bad investments and then expect the govt to bail them out.

aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I don't think Sri Lanka will grow as a manufacturing or industrial country such as Japan or Korea. It's nothing to do with a small market. (Japan or Korea are not big markets either they export worldwide. Also Japan fought with the world before 1950s. They were that powerful from the beginning. They were not Sri Lanka before 1950s.)

Sri Lanka will be a tropical travel destination like the Caribbeans. The foreigners are investing in the property, hotels, travel and leisure destination. Check out all the high rises planned in Colombo. They are all residential properties. (But none of the law abiding citizens of Sri Lanka can afford buy even a room in those apartments.) So it's more of consumption than production. Food, medicines and everything are going up in prices steadily you'll need a foreign salary live in this tourist destination. So you, Sri Lankans, can all be beach boys, waiters, cooks, janitors... May be I'll give a tip when I visit. Don't think about Japan, Korea think about Caribbeans islands. That's what Sri Lanka is.

Whitebull


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I am not suffering with Japanese mania or any other mania but if you want to live peacefully with ur vehicle you better not to go for India,China or Korean brands.I do not say each and every vehicle from those countries give troubles to you.There may be exceptions but most of the times they give real troubles.

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Yep. Thanks,

I kw this incident but machan i hope these are normal in any country.

Think what will happan to Japan and china factories.. Much bigger impact than this.

Every where people want more and more leaves but only the people who works more will be successful. I Personally know some business families who works more than 18 hours per day. ( They are billionaires.) Any way.

And AJ , I really appreciate your point And i always wanted thes type of arguments to be built among us. U got a good point this time and let me/us think on it.

Thanks

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
What Aj says will be correct if Gov. Or the policy makers dont take an action in 3 to 5 years time. Sri lanka currently get more and more FDI to hotel sector as u said. What Gov. should do is slowly encourage other sectors as well.

We need more and more businesses to be started and if not this will be just an hotel destination.

Additional port , Road dev. will give the required infrastructure for businesses and much needed Bantamweight ( one of the poorest district ) will be look after by MR. So there are plenty of bare lands to be occupied.

lets wait and see.

SL.Market

SL.Market
Vice President - Equity Analytics
Vice President - Equity Analytics
@Universalgoal wrote:i use early fb14 sold and turned to micro panda with the tax increase , now 1 and 1/2 year running excellent, and i feel better than fb14 , if any one want advice on panda car pm me cheers so no worries average people have a choice (i got rid of Japan mania which i had early )

1) Now You have to spend more than 3m to get a Japanese Car
you can buy Panda with all the options at 1.6m around

After Sales
2) you get 100,000km warranty
3) you get 3year warranty
4) and they replace what ever abnormal part immediately
5) at Kalaniya service center you get excellent service
6) at kalaniya service center they have the facility of 100cars to repair and service
7) and they use modern technology to serve the customers
Cool and if your car stall where ever car carrier come and lift to the service center free of charge (withing the warranty time)

pls note that this is not a promotion

this will help you to get an idea about a car and specially who are suffering from tax and Japanese mania

How about fuel consumption for panda, such a small car with gears manual transmission? at least 18km/1L?

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@aj wrote:I don't think Sri Lanka will grow as a manufacturing or industrial country such as Japan or Korea. It's nothing to do with a small market. (Japan or Korea are not big markets either they export worldwide. Also Japan fought with the world before 1950s. They were that powerful from the beginning. They were not Sri Lanka before 1950s.)

Sri Lanka will be a tropical travel destination like the Caribbeans. The foreigners are investing in the property, hotels, travel and leisure destination. Check out all the high rises planned in Colombo. They are all residential properties. (But none of the law abiding citizens of Sri Lanka can afford buy even a room in those apartments.) So it's more of consumption than production. Food, medicines and everything are going up in prices steadily you'll need a foreign salary live in this tourist destination. So you, Sri Lankans, can all be beach boys, waiters, cooks, janitors... May be I'll give a tip when I visit. Don't think about Japan, Korea think about Caribbeans islands. That's what Sri Lanka is.

Dude u seem to have a big EGO man.. Let me think... U educated from SL and went abroad now cursing SL cuz SL hasn't got the luxury u can enjoy there Twisted Evil Twisted Evil

So being beach boys, waiters, cooks, janitors are bad in SL but doing such in abroad is cool??

We also give tips to the ppl who carry the above services when we visit abroad know Wink..

Ah that's becuz ppl live in SL doesnt know what a person does abroad...

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@smallville wrote:
@aj wrote:
Sri Lanka will be a tropical travel destination like the Caribbeans. The foreigners are investing in the property, hotels, travel and leisure destination. Check out all the high rises planned in Colombo. They are all residential properties. (But none of the law abiding citizens of Sri Lanka can afford buy even a room in those apartments.) So it's more of consumption than production. Food, medicines and everything are going up in prices steadily you'll need a foreign salary live in this tourist destination. So you, Sri Lankans, can all be beach boys, waiters, cooks, janitors... May be I'll give a tip when I visit. Don't think about Japan, Korea think about Caribbeans islands. That's what Sri Lanka is.

Dude u seem to have a big EGO man.. Let me think... U educated from SL and went abroad now cursing SL cuz SL hasn't got the luxury u can enjoy there Twisted Evil Twisted Evil
So being beach boys, waiters, cooks, janitors are bad in SL but doing such in abroad is cool??
We also give tips to the ppl who carry the above services when we visit abroad know Wink..
Ah that's becuz ppl live in SL doesnt know what a person does abroad...

These Aj diaspora refugee types have hidden agendas. Born in Sri-Lanka refugees who try to undermine the country of their birth.

We should pity Bj, spending so much time gathering info on Sri-Lanking and then writing long winded rants. It seems that asylum centers in Aussie provide PCs and internet access for the likes of Bj.

Maybe Bj should start to worry about this http://adaderana.lk/news.php?nid=20497

Run and hide Aj before they come and deport you.

SL.Market

SL.Market
Vice President - Equity Analytics
Vice President - Equity Analytics
Please Answer... Then we can decide on Panda

@SL.Market wrote:
@Universalgoal wrote:i use early fb14 sold and turned to micro panda with the tax increase , now 1 and 1/2 year running excellent, and i feel better than fb14 , if any one want advice on panda car pm me cheers so no worries average people have a choice (i got rid of Japan mania which i had early )

1) Now You have to spend more than 3m to get a Japanese Car
you can buy Panda with all the options at 1.6m around

After Sales
2) you get 100,000km warranty
3) you get 3year warranty
4) and they replace what ever abnormal part immediately
5) at Kalaniya service center you get excellent service
6) at kalaniya service center they have the facility of 100cars to repair and service
7) and they use modern technology to serve the customers
Cool and if your car stall where ever car carrier come and lift to the service center free of charge (withing the warranty time)

pls note that this is not a promotion

this will help you to get an idea about a car and specially who are suffering from tax and Japanese mania

How about fuel consumption for panda, such a small car with gears manual transmission? at least 18km/1L?

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@SL.Market wrote:

How about fuel consumption for panda, such a small car with gears manual transmission? at least 18km/1L?
[/quote]

As per what I heard from a relative who bought this, Panda was not great on fuel like a Maruti but reasonable. Around 10-12 km/l in city limits mosly. Its 1.3L engine for a small car right?

But the interior looks really and comfortable than a Maruti or Alto.

How abt Geely MX7 @ 22 laks? A nice looking car with elegant interior Wink

The only problem with these Micro cars was those only come with manual trans rabbit

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