The Hon. Sajith Premadasa

¶ 01 Question by Private Notice: Taxes Imposed on Imported Electric Vehicles.

¶ 02 Hon. Speaker, vehicle import taxes have been structured in a complex way to satisfy various interests, allowing continuous evasion of import taxes through loopholes. The delay in introducing a simple and transparent vehicle tax regime results in loss of government revenue, market distortions and severe inconvenience to end consumers. Therefore, expecting a clear government policy on this, I raise the following:

¶ 03 01. Are taxes on imported electric vehicles levied on the maximum motor capacity or on the rated motor capacity? If not, what other criteria are applied? Are the applicable tax bands specified separately?

¶ 04 I raise this because there are allegations that a different regime is applied to parallel importers versus the authorized agent. Parallel importers are said to be assessed on maximum motor capacity, while the Road agency uses rated motor capacity. We need to know the methodology in force.

¶ 05 02. For used or latest BYD electric vehicles imported to Sri Lanka by the authorized agent, on what motor capacity have taxes actually been paid so far? Please state clearly.

¶ 06 03. What are the maximum motor capacity and the rated motor capacity stated for BYD ATTO 3 and other BYD electric vehicles imported by the local authorized agent?

¶ 07 04. Given the controversy that has arisen, have examinations commenced to verify the actual motor capacities of these electric vehicles? Who is conducting them? Is there international-level collaboration? What is the progress?

¶ 08 There are allegations that due to improper policy implementation, the tax loss per vehicle is as high as Rs. 4 to 4.5 million. We need accurate information.

¶ 09 05. Due to tax assessment confusion, how many vehicles are currently held at Customs? How many have been released? Will all such vehicles continue to be held until a solution is reached? If not, what is the government’s solution?

¶ 10 06. What is the amount of tax revenue lost so far due to this? Who is responsible? What steps will the government take?

¶ 11 There are reports that vehicles are being released upon bank guarantees to cover the difference in tax. If vehicles are to be released, it should be through a “duty plus value” formula to safeguard revenue. Any errors must be rectified and due revenue recovered.

¶ 12 07. Has the government drawn lessons from this issue and prepared proposals to reform vehicle import tax policy? When will this commence? Many developed countries operate formulas that are effective and do not harm the country. We need an appropriate program to minimize malpractice particularly in vehicle imports.

¶ 13 I look forward to the answers.