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Car Sale Ownera Telling 30% Tax Increase


esanda007

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so news like this, FOB value already increases and there will be nearly 32% increase of tax for japan vehicles. so n16 and 121 ended in 2.8 Mn :speechless-smiley-004: Wonder of Asia is near now

But who will buy? People can always increse sell price but does not mean it will suddenly sell.

We all know most Hybrid, Toyota or N16/FB15 buying types are fools

Edited by Aquaman
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To be honest I think we should all patiently wait till the budget and official announcement are made. As of right now everything seems to be more speculative than actual fact and everything that has been floating around has repercussions beyond just cars.

For example in what you claimed to have heard:

There might be issues in other areas of trade if the govt. increases tax on just Japanese brands of cars. Japan does a lot in a other areas of trade as well as infrastructure/technical development. So other than siting trade agreements with other countries that effectively maintains the current, or exempts them from new, taxes; there might be issues that could ripple down to those other areas.

If they for example increases taxes on car imports categorized as "used" then it should apply to all brands unless some trade agreement supersedes it. If such a measure is enforced then of course the most effected would be Japanese vehicles from Japan as that is what we bring down the most and even BNew cars from the JD market are categorized as used.

Then again, anything is possible in SL...so you never know...

True. We should wait till this hoo haa about the tax being increased to settle down, no point shouting out here that the tax was increased. Yes the prices quoted for used cars have gone up purely because of the 3rd party importers who have already jacked up their prices.

Being in the motor trade I must ad from my side, we haven't increased the prices like the outside parties and unfortunately we have run out of stocks of our best sellers. We had to increase the prices slightly due to exchange rate fluctuation, but not by that much (about 5% or less). I cannot speak on behalf of all, but in my case our company have stuck to our prices.

The reason for all this is because of the huge under valuing of cars by 3rd party importers, I don't think they will increase the tax IMO because anyway they get a higher tax from the new FOB value, and you will not be able to bring down the high end cars on the normal government servants permits. The future maybe hybrids for the high end cars.

As someone pointed you can impose a tax on vehicles entering the city, but then again our public transport has to be good (in Sri Lankan context "brilliant") and devoid of all these tuk tuks and idiotic Leyland / Tata drivers and motor bike riders.

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@sasika,

There are debates going on that......But how many of us can afford such a diesel vehicle is another problem. On the other hand hybrid vehicle reduces the wastage of energy produced by fossils converting it in to electrical energy. That is the main point here. Let us say diesel is more cleaner and economical but can we eradicate the petrol vehicles ? So what is the best available option so far we have ? It is petrol hybrid.......If there is a sophisticated diesel engine with hybrid facility it would be more economical and environmental friendly. But then again that question of price comes in.

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I also think this was done for the sole purpose of stopping the influx of vehicle imports during the pre-budget period.

With the budget i would guess there will be a significant rate hike and a more sensible (somewhere between previous low valuations and the new ridiculous valuations) valuation table.

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Close down the car sales or at least stop them from importing stocks without orders.

Let the people who want to buy, order and get a

1. Brand new car from the agents

2. Used car from dealers for a commission like the individual imports today.

That way government will be able to control the imports and would allow them to track the income of people more easily.

I don’t understand your rational behind point # 2. All the cars that are imported is for domestic use. Though they may sit on the sellers site for a while they will get snapped up by a local buyer at some point. It’s not like they have a shelf life and get shipped back or destroyed. If the government is to stem the flow of imports only option is to make them unattractive to potential buyers in the form of tax/duty hike. Another option may be to introduce a permit/license (per car) at a cost to import a car. Or increase the license, registration, insurance etc fees and funnel that money into infrastructure and public transportation improvements. Latter option will of course effect pretty much all the cars in the country but on the plus side there will only be a need for a smaller increase.

Bottom line is amount of cars pouring in to this country far out phase the rate of infrastructure development and there’s no other option but to stem the flow (atleast till the infrastructure catches up). This should effect everyone from a Maruti buyer (though I would personnel like to see the lower middle class upgrade from a 2/3 wheeler to a 4) to the BMW buyer. Similar schemes are in operation in other developed countries.

I find most of the responses here regarding this matter to be somewhat self-centered. You have a group of people (car owners of course) who want to see a cut in imports because of the traffic situation and then you have a group who has realized there is a problem but still would like the option to buy decent car for a reasonable price (have the cake and eat it too situation).

As some of you have already mentioned unless you sold your car weeks leading up to this fiasco and do not own a car right now, there no need to panic and start buying one. Unless you have “Sumanadasa’s” power of foresight best is to wait till the budget is tabled. My view is if there is a significant tax increase during the budget it’ll be short term (as in 3 -5 years) till the economy picks up. I won’t be surprised if the policymakers adopt some short term austerity measures.

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I am not sure what the logic of this, if they go ahead with it.

There are only 2 differing categories when come to vehicle sellers; Agents and Grey importers.

Mass or Individual all these importers fall in to the category of grey imports. So the scale is irrelevant.

If not for individual imports we would still be paying sky high prices for crappy cars imported by these big sales ppl.

This is like going backwards.

The only logic is that these mass scale buggers contribute a lot to the politicians and if you want to find most of the black money and hidden stashes of politicos in SL, just audit the car sales. :)

I think the plan is to introduce a scheme where only authorized licensed entities can import vehicles even that at a fixed quota. This way these entities can be closely monitored and regulated and there’s also the ability for extra revenue in the form of an import license. Will this work only time will tell.

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I think the plan is to introduce a scheme where only authorized licensed entities can import vehicles even that at a fixed quota. This way these entities can be closely monitored and regulated and there’s also the ability for extra revenue in the form of an import license. Will this work only time will tell.

might be draconian, but i think the best way is to relate the value of the vehicle you are allowed to import with the income of a person.

By hook or crook we need to get the income tax system working in this country.

Vehicles might be one good way to do that :)

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I don’t understand your rational behind point # 2. All the cars that are imported is for domestic use. Though they may sit on the sellers site for a while they will get snapped up by a local buyer at some point.It’s not like they have a shelf life and get shipped back or destroyed.

Which is something we don't need. If a person wants a car they can order and bring it down. Why keep vehicles in stocks since we are not producing them here anyway. We don't need to put down forex for a car that may sell in 1 month or 1 year. And this way you cut down the unnecessary price hikes that happen due to dealers including their financing charges and employment costs in to the car price,

If the government is to stem the flow of imports only option is to make them unattractive to potential buyers in the form of tax/duty hike.

This is done.

Another option may be to introduce a permit/license (per car) at a cost to import a car.

Why do we need this ? Unlike agents there is no after sales service here. So whether you import individual or through a sale you end up at the same place.

Bottom line is amount of cars pouring in to this country far out phase the rate of infrastructure development and there’s no other option but to stem the flow (atleast till the infrastructure catches up). This should effect everyone from a Maruti buyer (though I would personnel like to see the lower middle class upgrade from a 2/3 wheeler to a 4) to the BMW buyer. Similar schemes are in operation in other developed countries.

Yes. But we don't see that principle being applied. Check out the valuations. An Aqua is priced at the highest possible value whereas you can't find a 520 for the valuation price in the UK site (The right hand market related to us). I checked the UK site and the cheapest 520 goes for over GBP 30,000 whereas our valuation tables puts it in the region of 28k-29k.

So as always it is the middle class who is getting screwed here with the double standards.

I find most of the responses here regarding this matter to be somewhat self-centered. You have a group of people (car owners of course) who want to see a cut in imports because of the traffic situation and then you have a group who has realized there is a problem but still would like the option to buy decent car for a reasonable price (have the cake and eat it too situation).

All I am saying is if you are bringing the hammer down make the impact it same for all. Lot of tension is because rich is always get protected whereas the common man who pays all the PAYE tax and indirect taxes get squeezed more.

As some of you have already mentioned unless you sold your car weeks leading up to this fiasco and do not own a car right now, there no need to panic and start buying one. Unless you have “Sumanadasa’s” power of foresight best is to wait till the budget is tabled. My view is if there is a significant tax increase during the budget it’ll be short term (as in 3 -5 years) till the economy picks up. I won’t be surprised if the policymakers adopt some short term austerity measures.

As long as they lead by example in the austerity measures there is no problem. :)

Edited by B2Spirit
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>>>Another option may be to introduce a permit/license (per car) at a cost to import a car.

>>Why do we need this ? Unlike agents there is no after sales service here. So whether you import individual or through a sale you end up at the same place.

The permit has nothing to do with after sales service or anything. The permit is to restrict imports in to the country which will actually help enforce your idea of not having idling stock and import on a need-to-basis. So the permit acts like a controlling mechanism (kind of like the CoE in SG). I think something like this was in effect in the eighties as I remember my dad looking for permits to bring down a few cars and I read somewhere that te CoE scheme in SG was loosely modeled on the idea/principle of the permits we had back then (During the 80s I even heard my dad and his friends bringing down cars on their "passports"; no idea what that meant at the time but looking back at it I guess it meant something like if you worked abroad you can bring down a car and the duty allowance that you collect can be applied to the car you import ?).

As for your idea of restricting loan amounts; well since 99% (just using as a figure of speech) of cars are bought on loans and banks usually ask to see (at least should) proof of employment and income you could force the banks to lend only a a certain amount based on the actual declared income ( eg. x% of potential income over y number of years as maximum ?). Then again, considering salary scales in SL and the rate at which the Rs. fluctuates it also means that nothing more than Marutis and Geelys can be afforded by many.

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