July 13, Colombo (LNW): The Ceylon Motor Traders Association (CMTA) recently voiced serious concerns about the motor industry’s viability due to the latest tax increases proposed by the Government.
The Government initially imposed a complete import suspension on all types of vehicles in March 2020, intending it to last six months, but the suspension has now extended for over 31 months.
This extended ban, along with limitations in establishing Letters of Credit (LCs) for the past few months, has also reduced the import of genuine spare parts, negatively impacting the after-sales business, the remaining key revenue line for motor companies.
Before the import ban, CMTA members employed over 30,000 individuals and managed over 6,300 island-wide SMEs as dealers, which significantly contributed to the rural economy with over Rs. 2 billion in dealer incentives. T
The CMTA members also paid over Rs.6 billion for outsourced services and facilitated vehicle finances of over Rs124 billion, sustaining many jobs in trades like leasing and insurance.
In 2019, the motor trade’s excise duty contribution was Rs.130 billion, accounting for 6.8% of government revenue.
At the CMTA’s 104th Annual General Meeting (AGM), Virann de Zoysa of AMW Manufacturing was elected as Chairman, with Andrew Perera of Kia Motors Lanka appointed as Senior Vice Chairman and Lakmal de Silva of David Pieris Motor Company as Vice Chairman.
Addressing the AGM, de Zoysa highlighted the challenges faced due to the prolonged import restrictions and inconsistent policy changes, which negatively impacted the sector’s attractiveness to the Government.
He emphasized the need for sustainable policy and regulation, urging collaboration with stakeholders to address these issues.
Outgoing Chairman Charaka Perera of Stafford Motor Co Ltd. discussed CMTA’s efforts to regulate vehicle importers before reopening the market.
He proposed subjecting vehicles to an additional 140% duty with a 20% quarterly reduction to discourage overstocking and mitigate forex outflow.
He also noted that CMTA had been involved in several Ministerial and Cabinet Appointed committees to work on regulations and industry development, expressing his efforts to guide the association through challenges over the past two years.
The AGM, attended by over 140 dignitaries from the Government sector, diplomatic missions, and private sector, featured Chief Guest and Keynote Speaker Duminda Hulangamuwa, Chairman of the Ceylon Chamber of Commerce.
Hulangamuwa emphasized the need for the motor vehicle industry to rethink its business strategies and highlighted the unlikelihood of future Governments adopting a liberal approach to vehicle import permits.
He also stressed the importance of strict regulation to prevent malpractice in the motor vehicle industry, citing issues such as the foreign migrant worker scheme for electric vehicles.
Established in 1919, the CMTA is one of South Asia’s oldest automotive associations and has significantly contributed to Sri Lanka’s economy by creating employment opportunities both locally and internationally.
