Implementing VAT in January will cause definite collapse of service: Gemunu

13 December 2023 09:36 pm Views - 1205

Colombo, Dec.13 (Daily Mirror) - With the government's decision to implement the new value-added tax (VAT) at the rate of 18%, the Lanka Private Bus Owners' Association (LPBOA) Chairman Gemunu Wijerathne said yesterday that the tax will affect the private bus industry and will probably lead to a bus fare hike.

Addressing the media, he said that they were not aware that this VAT was scheduled to be implemented in January.

"During the past 25 years, no tax was imposed on importing standard private buses. But when importing luxury buses, there was a certain tax charged. Imposing a tax on the import of private buses was not adopted for public transport," he said.

"Unfortunately, with the increase in the dollar rate, the cost of a standard bus, which was between Rs. 5.5 million and Rs. 7 million, has now increased to Rs. 13.7 million. We had a 20,000-bus fleet, and now it has been reduced to 17,000. Currently, there is a shortage of 4,000 buses.

"With the increase in VAT, the price of a standard bus has increased to Rs. 15.7 million. With this price hike, bus owners have no capability to import buses. In parallel with the VAT, the price of spare parts, lubricants and service charges will increase.

"The increase in fuel prices will also affect heavily. This new VAT is added to the fuel prices, and as a result, the fuel prices will increase.

"Considering all these facts, there will be a definite increase in bus fare, and that will directly affect the people who use buses as their ordinary transport mode.

"With all these increases, it will not be possible to continue with this service, and this will cause a definite collapse of the service from January," Gemunu Wijerathne said.