SRI LANKA IMPORT BAN PUSHES MOTOR TRADERS OUT OF BUSINESS

Sri Lankan vehicle importers say import restrictions have put several vehicle traders out of business, forcing them to urge the government to consider their revival plan.

They made this appeal at a media conference held in Colombo recently pointing out that most of them are presently facing severe difficulties maintaining their business premises and paying off bank loans, rent and the salaries of their employees. An import ban on vehicle imports to save much needed foreign exchange will drastically drop tax revenue this year with motor traders facing a threat of bankruptcy, a business analyst said. Revenue generation from Excise duty on the importation of motor vehicles has declined to less than LKR 50 billion last (approx. EUR 214 million) year Provisional data revealed that it was notably down by LKR 43.1 billion (approx. EUR 184 million) in the first eight months of 2020, compared to LKR 81.5 billion (approx. EUR 347 million)recorded in the same period of 2019.This restrained performance was mainly due to the sharp decline in motor vehicle imports in the first eight months of 2020 due to the restriction imposed on the importation of motor vehicles effective from March 2020. In addition, an upward revision of Excise duty on motor vehicles in line with the budget 2019 has a negative impact on the importation of motor vehicles, he added. New car imports and registrations plunged to significant lows amid import controls, official data showed. Total vehicle registrations recorded 3,256 units in January down from 4,478 units the previous month and 34,475 units 12 months ago, an analysis of Vehicle Registrations issued by JB Securities revealed. Meanwhile the Vehicle Importers Association of Sri Lanka (VIASL) says they will be forced to close down their business and make all their employees redundant. The association is ready to put forward a reasonable survival plan that would enable them to meet their financial commitments. VIASL in a media release noted that they are making a public request to the government for the first time as veterans in this industry with years of knowledge and experience, to present the various proposals they have prepared that would allow importers to survive while controlling the outflow of foreign currency.