Import duty on vehicles salshed by 50%

The government has slashed Import duty on motor vehicles by 50% and a 15% surcharge on imported goods has also been removed, the Finance Ministry announced a short while ago.

Under the new ammendments tax on mobile phones, cameras, wrist watches, electronics and motor vehicles have been withdrawn. 

A statement from the Ministry declared that the new tax cuts are a result of President Mahinda Rajapaksa's decision to provide a boost to the rapidly recovering post conflict economy. 

In his capacity as the Minister of Finance, President Rajapaksa has abolished the 2.5% import duty on most raw materials, plants and machinery. 

According to the Ministry, the multiplicity of the custom duty structure has been simplified witha four-band structure of 0, 5, 15 and 30 percent. 

"In support of the expanding tourism activity and rising level of tourist arrivals, the Government has also slashed duties on motor vehicles by 50%. To promote Sri Lanka as an attractive shopping center for internationally branded products of phones, wrist watches, cameras and electronics have also been bought down below 10% of overall taxes," the Ministry said. 

The above items will be liable only for Port Levy and Nation Building tax and have exempted from VAT and Cess. 

A distortionary Cess has also been scaled down to boost domestic activities whlie Cess will be maintained only for selected import affecting domestic activities which required safeguard from unfair import competition. 

"In order to further support for local value added activities while making raw materials, plant and machinery imports available at zero duty, the Government is also working towards providing antidumping legislation, labeling legislation, prescription of quality standards, etc., to provide the enabling environment for home based industries. As Government is moving towards a simple tax structure, all essential commodities will be liable at the point of imports only for special commodity levy. This will minimise the cumbersome administrative procedures, particularly for small traders who are generally engaged in such import business," the Ministry said.