Small scale vehicle importers, who consist of more
than 70% of the total vehicle dealers in the country allege that they
will go bust if the recent proposal requiring a vehicle importer to
obtain an annual license is implemented while the authorities maintain
that such measures are necessary to save the vehicle buyers from the
unscrupulous traders who compromise on quality.
Chairman of Vehicle Importers Association of Lanka (VIAL), Sampath Merenchige says that the government’s plan to impose an annual license fee of Rs 5 million for small players would push the small player out leaving only a few large firms competing in the industry.
“This is no more an industry which is dominated by a few large scale dealers limited to Colombo. There are people who bring down one or two vehicles depending on the requirement of the area and could be the bread and butter of large number of people who directly and indirectly depending on this trade. They would certainly go out of business overnight because I don’t think they can even dream of paying such a colossal amount annually for a license,” Merenchige said.
He noted that although they were prepared to help the government in making the industry more organized, even possibly with a licensing scheme, they were not capable of spending the reported ‘huge’ amount as annual fees.
The VIAL Chairman further stated that the recent policy changes by the government including hikes in excise duty, interest rates, appreciation of the dollar, higher transportation cost due to shifting the port to Hambantota and the more recent directive to obtain a permit will eventually increase vehicle prices.
“These measures will result in owning a vehicle a dream forever for the poor masses,” he highlighted.
Meanwhile, according to the government, the recently proposed requirement to obtain annual permits for vehicle importers is expected to streamline the industry which has been long ailing with haphazard entry of players who compromise on the quality of vehicles thus affecting the consumer.
Explaining the underlying reasons behind this new initiative, the Director General of Department of National Planning at the Ministry of Finance, Dr B M S Batagoda told The Nation “We saw there has been a continuing issue with the quality of the vehicles which are imported by some unorganized vehicle importers in the country and this is something we cannot keep a blind eye on as responsible authorities because ultimately it’s the poor customers who are affected”.
He further noted there was a racket by some of these parties who attempt to evade from the country’s excise duty system by deliberately undervaluing the vehicle’s real value at the point of exporting from a foreign country. “We cannot let it happen because the country is losing at the end of the day due to less taxes paid,” he added.
Chairman of Vehicle Importers Association of Lanka (VIAL), Sampath Merenchige says that the government’s plan to impose an annual license fee of Rs 5 million for small players would push the small player out leaving only a few large firms competing in the industry.
“This is no more an industry which is dominated by a few large scale dealers limited to Colombo. There are people who bring down one or two vehicles depending on the requirement of the area and could be the bread and butter of large number of people who directly and indirectly depending on this trade. They would certainly go out of business overnight because I don’t think they can even dream of paying such a colossal amount annually for a license,” Merenchige said.
He noted that although they were prepared to help the government in making the industry more organized, even possibly with a licensing scheme, they were not capable of spending the reported ‘huge’ amount as annual fees.
The VIAL Chairman further stated that the recent policy changes by the government including hikes in excise duty, interest rates, appreciation of the dollar, higher transportation cost due to shifting the port to Hambantota and the more recent directive to obtain a permit will eventually increase vehicle prices.
“These measures will result in owning a vehicle a dream forever for the poor masses,” he highlighted.
Meanwhile, according to the government, the recently proposed requirement to obtain annual permits for vehicle importers is expected to streamline the industry which has been long ailing with haphazard entry of players who compromise on the quality of vehicles thus affecting the consumer.
Explaining the underlying reasons behind this new initiative, the Director General of Department of National Planning at the Ministry of Finance, Dr B M S Batagoda told The Nation “We saw there has been a continuing issue with the quality of the vehicles which are imported by some unorganized vehicle importers in the country and this is something we cannot keep a blind eye on as responsible authorities because ultimately it’s the poor customers who are affected”.
He further noted there was a racket by some of these parties who attempt to evade from the country’s excise duty system by deliberately undervaluing the vehicle’s real value at the point of exporting from a foreign country. “We cannot let it happen because the country is losing at the end of the day due to less taxes paid,” he added.
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