Sri Lanka loses Rs.94bn from concessionary vehicle permits per annum

• This offsets almost entirety of taxes from vehicle imports in a year 

Sri Lanka is losing around Rs.94 billion annually from the concessionary vehicle permits, which is nearly equivalent to the amount the government collects from taxing vehicle imports, making a mockery of the government’s vehicle taxation policy. 

According to the data presented by Moratuwa University Senior Professor for Transport and Logistics Amal Kumarage, Sri Lanka has made its taxation and transport policy completely lopsided over the decades by not taxing luxury vehicles and vehicles with higher engine capacity through the concessionary vehicle permit system. 

He said Sri Lanka annually offers up to 10,000 concessionary vehicle permits, most of which are used to import vehicles, which are either luxury or with higher engine capacity, losing the government a thumping Rs.94 billion per annum. 

This is almost equivalent to the Rs.97 billion the Treasury earns from the private vehicle imports in a year. 
“Stop concessionary vehicle permits, which is a loss to the country,” Prof. Kumarage insisted. 

“The taxation process is pointless because the amount earned from imports is nearly equal to the loss from concessionary imports,” he told a webinar on how Sri Lanka could make its transport a sustainable affair. 
Speaking further, he asked how Sri Lanka could ever shift people from private transport to more sustainable and decent quality public transport when the government openly and actively promotes private vehicle imports without even charging the relevant duties. 

Making it further anomalous, Prof. Kumarage said Sri Lanka does not spend close to what the government earns from taxing vehicle imports on public transport. 

Therefore, he urged the authorities to close this anomaly forthwith and spend on public transport systems from what they collect from vehicle imports even when the vehicle imports are restored. 

Sri Lanka opened the floodgates for vehicle imports, both after the end of the war in 2009, claiming to offer peace dividends and again in 2015, making the country’s urban roads largely immovable.