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Govt. brakes on vehicle undervaluation and consequent revenue loss
The Finance Ministry, next week, will gazette new regulations to prevent undervaluation of vehicles that deprives the Government billions of rupees annually in revenue, said Finance Minister Ravi Karunanayake.
The move comes after revelations that vehicle importers deprived the Government Rs 64 billion in revenue by way of duty and taxes, during the past nine months, Mr Karunanayake explained.
The new regulations will enable the Customs to compare prices with the manufacturing company and impose duty accordingly on the value of the vehicle.
The regulations will prevent importers, including small scale car importers from undervaluing the imported vehicle, claiming it does not have all the options mentioned in the original vehicle.
Mr Karunanayake said, in addition to collecting the due revenue, Government will ensure that the buyer of the vehicle is guaranteed of all options indicated by the manufacturer, available in the vehicle.
“We have found that the same models are available at different prices. Under this scheme the price of a particular model will be the same, irrespective of the importer,” he said.
Deputy Minister Lakshman Yapa Abeywardena told the Sunday Times that under the present system, not only the Government, but the buyer too has no guarantee that he has got value for money.
“Under this scheme, the vehicles will have to be of same standard and available at the same price,” he said.
Mr Abeywardena said the regulations will provide a legal basis for the import of vehicles and duty charged. Prices of vehicles will be published on a website, so that people are aware of the prices,” he added.
However, Vehicle Importers Association of Sri Lanka, President, Mahinda Sarathchandra told the Sunday Times that they have made representations to the Finance Minister about the regulations, as they believe only the large scale importers will benefit.
“There are some 1,500 vehicle importers with about 100,000 indirect jobs in the trade. Most of them will be affected,” he said.
Mr Sarathchandra warned that vehicle prices already increased by the depreciation of the rupee against the US dollar, will rise further.
Sri Lanka’s vehicle imports have been on the rise in recent months with 8,869 vehicles being registered in August. In a bid to reduce imports Government last week prohibited 100% leasing for vehicle purchases, and reduced it to a maximum of 70%.