There will be a marked decrease in the prices of motorcars and vans under the below 1000 cc engine capacity due to the new simple tax system introduced through the 2015 Budget proposals, chairman of the Vehicle Importers’ Association of Sri Lanka, Sampath Merinchige told adaderanabiz.lk.

He added that though there could be a slight downward trend in the prices of hybrid and Japanese car, it would not be that significant.

However, they are looking to provide the maximum concessions on these vehicles, said Merinchige.

“There was a great demand for vans. We were unable to import and cater to the demand. The government has taken this into consideration and reduced the duty by about one-thirds. Hence, there are greater opportunities to import vans in the future,” he said.

He added that the vehicle importers had urged the government to implement a simpler taxation on vehicle imports to Sri Lanka and that this request has been implemented through this budget.

According to Sampath Merinchige, this simplified taxation on vehicle imports would reduce the tax evasions and thus increase the government coffers.

The Deputy Secretary to the Finance Ministry told adaderanabiz.lk yesterday that the customs duty on motorcars would decrease by around 20 to 25 per cent and on vans by around 25 to 65 percent due to the new tax amendments imposed through the 2015 Budget proposals.

Deputy Secretary S.R. Attygalle told adaderanabiz.lk that these Budget proposals would be effective from midnight on 24 October and that the prices of motorcars and vans would definitely decrease.

“A special tax has been introduced through this Budget which includes all the duties in the import of motorcars and vans. Hence, the prices of these vehicles would definitely decrease,” said Attygalle.

According to this new tax amendment, the 202 per cent duty on the import of motorcars below 1000 cc engine capacity has been reduced to 173 per cent.

Accordingly, the import duty on small motorcars would decrees by around 29 per cent.

Where vans are concerned, the 175 per cent duty on cargo vans and the 126 per cent duty on 13 to 20 seater vans have been slashed by 100 per cent.