Halving of taxes on vehicle imports

The Island

Will it cause value of MPs’ car permits to plummet?

A government decision to halve excise duties on imported vehicles by 50 per cent may upset some MPs’ plans to sell their duty free vehicle permits for a premium sum.

Any MP prepared to put on the market his or her vehicle permit could have received as much as Rs. 13 to 15 million due to the sharp increase in what a politician called the permit value of the vehicles from $ 35,000 to $ 50,000.

The reduction in excise duties would bring down the value of the vehicle permits, though one permit could still fetch as much as Rs. 7.5 to 9 million, sources told The Island.

Responding to a query by The Island, sources said that a permit with a value of $ 35,000 had fetched upto Rs. 9 million. Politicians could have made a packet if the Treasury had not slashed the excise duties, while increasing the value of the permits, sources said.

Parliamentary Affairs Minister Sumdeha Jayasena presented a cabinet paper seeking to increase the value to $ 50,000. Sources said that many MPs had pushed for an increased allocation claiming that $ 35,000 was not enough for them to acquire a full option vehicle. The Cabinet unanimously approved it.

Sources pointed out that the largest number of beneficiaries would be SLFP members. Of the 144-member government parliamentary group, 123 are SLFPers and the rest members of UPFA’s constituent partners.The rest of the 225-member Parliament comprises 60 UNF, 14 TNA and 7 DNA MPs. The Opposition is yet to condemn the government for increasing the value of the vehicle permit.

Sources said that MPs could delay obtaining the facility and wait till the government reintroduced the excise duties later this year. Political and business sources said that the reduction of taxes could be a temporary measure until the presentation of the next budget in parliament in November.

Provincial Councillors, too, would now push for an increase in the permit value of the vehicles given to them. They received permits worth $ 17,500.

Sources revealed that there had been cases of a few politicians receiving duty-free vehicle permits both as Provincial Councillors and MPs. Sources said that for want of an effective system, some politicians had taken advantage of the facility. A case in point was a member of a minority party receiving a permit immediately after he entered the sixth parliament following the death of an MP last year. Sources said that the man had been denied an opportunity to contest last election, but received a permit to the value of $ 35,000.

Although authorities could take action against anyone abusing the facility, such misuse was rampant, sources said.