The Committee on Public Finance (COPF) has expressed concern over potential losses to state revenue due to inconsistencies in the taxation of imported motor vehicles, particularly used and low-mileage units.
During a recent meeting of the Committee, COPF Chair MP Dr. Harsha de Silva questioned officials from the Sri Lanka Customs Department regarding the application of taxes on both registered and unregistered vehicle imports.
Special attention was drawn to the collection of Value Added Tax (VAT) on used vehicles and whether the current mechanisms in place ensure fairness and efficiency.
Customs officials acknowledged that tax rates differ for used vehicles that are unregistered and have been driven only for short distances.
Dr. de Silva pointed out that this disparity could lead to significant revenue losses, particularly at a time when the government anticipates substantial income from vehicle imports.
The COPF also instructed the Customs Department to submit a detailed report based on a sample of imported used vehicles, outlining the taxes collected and identifying any discrepancies in valuation or procedure.
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