HYBRID VEHICLE LEASING MADE 70 to 30% : Finance Minister

The unity government has always listened to the people.Through the proposals of the people, we have been able to further satisfy them with this budget, Finance Minister Mangala Samaraweera said.

“We have taken measures to reduce the tax on electric vehicles from midnight on Wednesday, including used electric vehicles.Earlier we said leasing facilities for hybrid vehicles would be made 50 to 50 percent, but now we have further improved that to 70 to 30 percent,” he said. Minister Samaraweera, making the winding up speech in the second reading of the Budget-2018 debate, announced details of the procedure for collecting VAT on the sale of condominium housing unit and the removal of restrictions on the foreign ownerships on the shipping and the freight forwarding agencies.

The minister relaxed the policies further and announced that the importation of vehicles has also revised the policy on Loan to Value (LTV) ratio on the financing for purchase of vehicles under lease basis.

Responding to the Joint Opposition, Samaraweera said the Joint Opposition members were talking as if they have awoken from the dead.

“The Lamborghini tax was relaxed, the Marriage Tax was increased by Rs. 4,000 and the death certificate levy was increased by Rs. 2,000. I don’t want to speak of how they presented the budget, but they put the country into an abyss.They failed to listen to the people and increased the price of many food items.

“The Loan to Value Ratio will be revised and the Finance facilities could be provided by banks up to 50 percent of the value - for petrol and diesel motor cars,70 percent of the value - for hybrid cars and 90 percent of the value - for electric cars. Duty on locally assembled vehicles will remain as 30 percent and not 40 percent as announced in the budget on November 9,” he said.

The tax concession announced in the budget 2018 for the imported brand new electric cars will be extended to cover used electric cars, which are not more than one year old.

According to a Gazette notification issued by the Finance and Mass Media Minister Mangala Samaraweera, the duty of the used electric cars that are not more than one year old will be reduced by around Rs. one million. Consequently, the duty rate applicable to electric vehicles (less than one year old) will be Rs. 12,500.00 per KW power of the motor of the electric car which is less than 100 KW power.

Speaking on the VAT liability on the sale of condominium housing units, he noted that the sale of condominium housing units will be liable for VAT from April 1, 2018. However, sale under a sales agreement entered in to, before April 1 will not be liable for VAT.

The Finance Minister said the country was now on the cusp of a current account surplus in the budget for the first time in decades. “External reserves have stabilised after being decimated by the significant external debt repayments that had to be made to service the debts of the previous regime. The confidence of global markets has returned as indicated by the spike in foreign returns in debt and equity markets this year,” he said.

“The budget talks of a group of young people. They were forgotten by all the previous governments.” he said.

He referred to the nearly 200,000 young people who reach the doors of universities and are turned back. “The system had failed them but today our government has reached out to this pool of unique talent that needs to be empowered. The extensive reforms in this budget will empower this young talent,” the Finance Minister said. 

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