Sri Lanka sets record in used car exports
The environmental study done by the Moratuwa University has suggested that coal and other hazardous industries should not be given the green light for the proposed Hambantota Port’s Industrial Zone.
The Ports Authority will reinvest capital to provide additional infrastructure that includes electricity supply, water supply and waste water treatment.
Laugfs Terminals Limited has already entered into a Business Venture Agreement with the Ports Authority and is currently progressing with construction work at the site.
Sri Lanka set a record as the number one destination for used car exports from Japan in terms of value in 2015.
Malaysia is in the second place but almost 40% lower, a JB Securities report on the subject said.
The largest volume is to New Zealand but the unit value is low since they are old cars, alternatively we import relatively new cars being mainly hybrids and electrics. The main reason for the heightened demand for this category of vehicles was aggressive credit extension from commercial banks – financing rates came down to around Rs 19,000/month/Rs 1 million from around Rs 25,000/month/Rs 1 million – this increased affordability coupled with an overvalued exchange rate till September fuelled a massive increase in demand.
Inclusive of the profit multiplier on excise duty of 15%, total tariffs on petrol cars was 172% and on hybrids was 92%, this was a 80% difference, the CIF value of a hybrid car is only 15% more than a petrol one so there is a net advantage of 65%. Hybrid excise rates were increased from 80% to 90% so this advantage comes down to 55% going forward, the JB Securities report said.
Meanwhile vehicle imports to Sri Lanka set a new record in terms of revenue collection for the treasury with the customs recording Rs. 229 billion in tax collections in 2015 surpassing the previous record set in 2011 of around Rs. 134 billion.
The revenue collected in 2015 is perhaps double that collected in 2014. The treasury is projecting to collect Rs.280 billion in 2016 which is a 22% increase over 2015 and a 140% increase over 2014 – this is a near impossibility.
“All indications are the realistic estimate in 2016 will be lower. We are estimating it to be around Rs. 180 billion (potential downside error) – 35% lower that the treasury estimate for 2016 and 20% lower than 2015,” a JB Securities report on the subject said.