Sri Lanka government’s tax cuts throw lifeline to Indian car imports
View(s):Sri Lanka’s vehicle importers are expecting a high growth in their sales this year following the tax cut which came into effect this year.
The motor trade moves towards a positive outlook especially in the small car segment with average sales of 2500 units per month during the first quarter 2015, Immediate past chairman of Ceylon Motor Traders Association (CMTA) Tilak Gunasekara , ManagingDirector of Sathosa Motors Plc told Business Times.
Sunny prospects for the automobile sector in 2015 have been helped by the fact that loans and leasing facilities to buy automobiles are now much more appealing, as interest rates are currently low and stable, he added.
Imports of small cars from India have begun to rise sharply from December as credit picked up, surged further in March following a tax cut, he said adding that registrations of Maruti/Suzuki cars from India was around 1700 per month during this period.
He noted that buyers will have to be in the waiting list for at least three months to get down their Maruti/Suzuki cars. The demand for these vehicles is increasing daily, he added.
Registrations of Maruti/Suzuki cars from India was up nearly 1000 percent from a year earlier to 2,531 units in March 2015 compared to 234 in March 2014, MTD statistics showed.
In March this year Maruti registrations were also sharply up after which taxes were cut by around 15 percent.
Maruti Alto registrations rose to 2,263 units in March up from 1,160 in January and 1,320 in February.
The average sales of super luxury vehicles such as Mercedes Benz and BMW also rose to 45 units and 23 units respectively; he disclosed quoting Motor Traffic Department data.
Mr. Gunasekera pointed out that vehicle registrations during the first quarter this year were up by 109 percent to 146,851 units from 70,201 during the same period last year. Chairman of the CMTA, Gihan Pilapitiya said duty and other taxes levied on the automotive industry had totalled approximately Rs.100 billion in 2014 and this figure would increase further if a set of consistent and transparent policies were adopted by the Government with the concurrence and support of the Industry.
Cars were among the best type of imports from a government revenue perspective, as more than two dollars equivalent of revenue is earned for every dollar spent, except for electric cars and hybrids, which are taxed less, he opined.
He noted that the industry has been able to breathe a sigh of relief following the new tax regime introduced from 2015 interim budget and the current valuation system.
This should be a consistent policy for the survival of local motor traders he emphasised.