SME optimistic over tax cut on small trucks

The SME sector and the mini truck dealers welcomed the move by the government to slash the Ad-valorem excise duty valuation method on motorcycles, mini trucks and single cabs.

The duty on mini trucks and single cabs is expected to reducedby Rs 300,000 with effect from midnight yesterday.

Nimal Welgama Chairman Ideal Motors said that this was a very welcome move and would be a major boost to the SME sector that spends a lot of money for point to point transport to third parties. “The SME sector was struggling due to high transport cost and now they can think of owning a vehicle of their own,” he said.

“As an importer we are now able to pass on this benefit to the customers and we are happy that the new Finance Minister did such a commendable move. This is a very humanitarian deed and most is commendable.”

“Motor Industry welcomes the reduction of duty on small vehicles, however import levies of Rs 700,000 per vehicle is still very high. As these small vehicles are mainly purchased by self employed individuals having very limited income and they cannot afford the higher initial payment and monthly installment payments,” said CEO, Lanka Ashok Layland, Umesh Gautham.

Similarly few months back the sudden decision of the Ministry of Finance to impose 50% excise duty on the import of chassis without cabin and body for building cabin and bodies locally has killed the entire local industry. Similarly, the excise duty on fully built trucks were reduced to 40%. This decision has made hundreds of local body builders and assemblers jobless. “To provide continued employment of local youth we strongly feel that duty on fully built truck should be higher than the truck chassis imported for local assembly and local cabin and body building,” he said.

Meanwhile Finance Minister Mangala Samaraweera said the 90% tax which is imposed based on the value of motorcycles will be removed. However sources from the automobile industry when contacted over the tax reduction on motorbikes said that they could not fathom the fact that the government will reduced the duty by 90 % when the motor cycle market was in its peak.

He said the entire motorcycle market were 30,000 and questioned as to what was the reason for reducing the duty and that there was a possibility that the duty reduction story could be a misinterpretation by the media.

The source said that currently the duty on motor bikes less than 150cc was 90% or unit rate on cc value which ever was higher.

Some people assume that the government has done away with the 90% method and the entire tax will be calculated based on the unit rate method.

He however said that they felt that there was a distortion of information and added that there were different schools of thought as to how this was going to be calculated but no one was quite aware of the actual scenario at this point of time.

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