Taxes on Motor Vehicles

  • Budget 2016 introduced the engine capacity based unit rate method for Excise Duty calculation for motor cars. Therefore, proposed to extend the engine capacity based Excise Duty to Motor Cycles as well.
  • Government is committed to encourage green energy consumption and proposed to reduce Excise Duty on electric cars with motor power less than 100 KW.
  • To support local industries the age limit for importing lorries and refrigerated trucks of capacity over 5 Metric Tonne to be extended to 10 years.
  • Several duty revisions to correct anomalies in the duty structure will also be made. These changes will be implemented with effect from 11th November 2016.
  • With regard to motor vehicles, passenger safety is of paramount importance. As an initial step to encourage safety, I propose to set 88 motor vehicle standards of SRS, air bags, ABS and three point seat belts will be made compulsory for motor cars to ensure the road safety.
  • Vehicle Entitlement Fee (VEF) is paid at the time of opening of LCs, to the banks and proposed to change this procedure. This Fee will be paid at the Sri Lanka Customs at the time of clearance of the vehicle. Upon payment a certificate with details of the imported vehicle will be issued.
  • Proposed tax incentive on exporting vehicles which are more than 5 years old. Any export of not less than USD 200,000 that constitute minimum of 20 vehicles will be granted an Excise Duty waiver of 50 percent from the payable duty for importing a motor car with CIF value not exceeding USD 50,000.