The government announced an increase on taxes on almost all types of motor vehicles today in a move it claimed was aimed at reducing the number of new vehicles on the road and demand for fuel.
A statement by the Ministry of Finance said that the government had also decided to revise the tax on cigarettes and Liquor with effective from today.
The statement said that compared with 2009 Sri Lanka saw a 121 percent increase in the number of motor vehicles imported to the country in 2010 and a 147 percent increase by last year.
The government also said that there was an 81 percent increase on the number of motorcycles imported to Sri Lanka in 2011 as compared to 2009 and a 298 percent increase in three-wheelers.
The Ministry said that as a result steps were taken to increase the production tax on vehicles taking into consideration, and with the aim of reducing the rapid increase of the importation of motor vehicles, traffic congestion and the increased demand for fuel.
The Ministry of Finance however said that there will be no change on the production tax on agricultural tractors, buses and lorries.
Accordingly the production tax on petrol cars which an engine capacity ranging from below 1000 cc, between 1000 – 1600 cc and 1600 – 2000 cc have been raised to 200% from the present 120%.
The production tax on petrol cars which has an engine capacity ranging between 2000cc to 3000cc has been raised from the current 154% to 250% of the total import value.
Production tax of Hybrid cars which has an engine capacity of below 2000 has been increased from the present 51% to 60% of the total value.
The government also announced an increase on the excise duty on a liter of imported beer by Rs. 50 and a liter of locally brewing beer by Rs. 5 as well as Rs. 60 on a liter of hard liquor.
The tax on cigarettes has also been increased to reflect a one rupee price increase on all cigarettes sold in the market, the Ministry of Finance said.