The number of vehicles registered during 2012 has recorded a 30 per cent decline to 397,295 from the highest figure of 575,000 recorded in 2011, according to the latest data released by the Department of Motor Traffic.

According to No. 8 of 2009 Motor Traffic (Amendment) Act, the department has collected as much as Rs.7.0 billion from vehicle registration & transfer (Rs.5.936 billion), sales tax (Rs.34 million) and luxury taxes (Rs.1.065 billion) during the period. Although directly incomparable, this is against the Rs.7.0 billion collected in 2011 as a whole.

According to the Commissioner General S.H Harishchandra, the country’s motor cars owned by 100 persons have increased by 26 per cent over the last five years from 1.7 motor cars in 2007 to 2.14 by the end of 2011.

Currently there are roughly 4.5 million of all types of registered vehicles in the country whilst during the last five years alone 1.68 million registrations were carried out, of which 2012 recorded the highest number exceeding the historical 575,000, while a large number of vehicles in the country remain unregistered.

The government raised the duties on motor vehicles last April in a bid to curtail the influx of vehicle imports which peaked in 2011 after the reduction of 50 per cent import tax on vehicles in June 2010 which resulted in a massive trade deficit of US $ 9.74 billion in 2011.

Subsequently the budget 2013 once again increased the excise levy on motor vehicles in a bid to collect Rs.1, 250 million as new revenue.