Sri Lanka earns Rs.717 mln from annual taxes’ on 'luxury cars’

Sri Lanka has raised annual taxes on ‘luxury’ cars by around 50% in the 2012 budget to increase revenue of the government coffers.

The Motor Traffic Department has earned Rs.717 million from annual taxes on luxury cars last year and it is targeted to double this revenue this year, said Commissioner General of Motor Traffic B.D.L Dharmapriya.

Sri Lanka has raised annual taxes on ' luxury' cars from between Rs. 20,000 to Rs. 50,000 ru- pees a year with new vehicles with engine capacity over two litres, being charged the highest rates of Rs. 150,000.

According to Sri Lanka's budget for 2012, ' luxury' diesel cars over 2.5 litres of engine capacity and petrol cars over 2.0 litres will be charged a Rs. 150,000 fee in the first year - up from Rs.100,000, and Rs. 100,000 in the second year, up from Rs. 78,000 rupees.

For semi luxury diesel cars and jeeps with engines of 2.2 litres and petrol cars over 1.8 li- tres 2.2, the first year fee tax has been increased to Rs. 60,000 from Rs. 50,000, in the second year to Rs. 50,000 from Rs. 39,375 and in the third year to Rs. 40,000 from Rs. 34,000.

For dual purpose diesel cabs over 2.2 litre engines the rate has been raised to Rs. 40,000 from Rs. 20,000 in the first year and to Rs. 25,000 from Rs. 15,750 in the second year and to Rs. 20,000 from Rs. 13,600 in the third year.

In addition, the revenue licensing and registration annual fee for motor vehicles has also been increased. As a result, the charges payable on the registration of the vehicle and the presently applicable withholding tax, would be amalgamated with the vehicle registration charges.

Thereby vehicles which have a capacity less than 1600 cc will have to pay Rs. 15,000 rupees, up from Rs. 10,000 rupees. The registration of vehicles which are above 1600 cc has been increased by Rs. 10,000, other department officials said.