The value of the vehicle is not the determining factor when imposing taxes, Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma said in Parliament today (20).
Speaking during the debate on the Excise (Special Provisions) Act in Parliament, Deputy Minister Suriyapperuma said the type of vehicle and the cubic centimeter (cc) capacity are factored in when imposing excise duty.
Accordingly, diesel vehicles are taxed the most followed by petrol vehicles while the lowest duty is imposed on electric vehicles. Meanwhile, duty imposed on hybrid vehicles is higher than the amount imposed on electric vehicles but lower than both diesel and petrol vehicles, according to the Deputy Minister of Finance.
He said they have taken measures to reduce the vast disparity in duty imposed on different types of vehicles.
Deputy Minister Dr. Harshana Suriyapperuma said taxes have been revised according to the Gazette issued on 31 January, and fundamentals such as foreign reserves and the government revenue were considered thoroughly when deciding on the percentages.
He stated that the revenue generated through taxes imposed on vehicles is one of the biggest sources of income for the government and therefore the decision was taken after lengthy deliberations.
Deputy Minister Suriyapperuma added that they have been successful in achieving the targets set in terms of foreign reserves, allocation of funds for imports and government revenue.
With the funds generated through taxes imposed on vehicle imports, the government is intending on making bigger allocations for development projects which will also help stimulate the economy.
