On 26th May 2016, the government of Sri Lanka introduced a radically new Unit Rate Tax that will affect vehicle prices in the country according to the engine capacity of individual vehicles. This drastic vehicle tax is now causing many controversies among the country’s political elites as well as among the ordinary car buyers. Based on the new circular released by the government, the Ceylon Motor Traders Association (CMTA) issued a press release mentioning that the price of passenger vehicles could increase by as much as 133%. This newly introduced Unit Rate Tax will primarily result a price hike on vehicles with an engine capacity of more than 1000 CC (1.0 L), while vehicles that have an internal combustion engine with less than 1000 CC are expected to see a tax rate reduction in the local market. However, the reduction of taxes for vehicles with an engine less than 1000 CC will not affect Three-Wheelers (Auto rickshaws), which are expected to see a tax hike of up to Rs. 400,000 in the Sri Lankan market.

Nevertheless, this price fluctuation according to the engine capacity has only affected family grade vehicles, as the new Unit Rate Tax will not affect commercial grade vehicles, such as Vans, Trucks and Buses. Electric vehicles are also subject to the new tax reforms and lower grade electric cars such as the Nissan Leaf, will see a sharp drop in its taxation rate while higher grade electric vehicles such as the Tesla Model S will see a significant increase in its overall price.

To make things easier for you to understand, we have given a breakdown of some of the vehicles that will see the best and the worst due to the new vehicle tax reforms.

Models with the Highest New Tax Charge, As For the New Reforms:

No Vehicle Model Engine Size (CC) Previous Duty (Rs.) New Duty (Rs.)
1 Toyota Land Cruiser Prado 2690 CC 12,725,000 16,141,750
2 Honda CR-V 2490 CC 10,930,000 14,941,750
3 Mazda CX5 2490 CC 10,100,000 14,941,750
4 Toyota NX300H Hybrid 2490 CC 12,190,000 12,451,750
5 Toyota Harrier Hybrid 2490 CC 10,120,000 12,451,750
6 Toyota Camry Hybrid 2500 CC 7,560,000 12,451,750
7 Mazda CX5 1998 CC 6,190,000 8,988,250
8 Honda CR-V 1990 CC 7,270,000 8,956,750
9 Mazda Axela Hybrid 1997 CC 3,730,000 7,989,750
10 Subaru Axela Hybrid 1997 CC 3,815,000 7,989,750

 

Models That Will See the Least Tax Hike Differentiation Due to the New Tax Reforms:

No Vehicle Model Engine Size (CC) Previous Duty (Rs.) New Duty (Rs.)
1 Honda Grace Hybrid 1490 CC 2,945,000 2,981,750
2 Honda Fit Hybrid 4W 1490 CC 2,910,000 2,981,750
3 Toyota Premio/ Allion 1490 CC 5,030,000 5,120,000
4 Honda Fit Hybrid 1330 CC 2,550,000 2,661,750
5 Toyota Axio Hybrid 1490 CC 2,855,000 3,020,000
6 Honda Fit Hybrid 1490 CC 2,760,000 2,981,750
7 Toyota Aqua Hybrid 1490 CC 2,735,000 2,981,750
8 Toyota NX300H Hybrid 2490 CC 12,190,000 12,451,750
9 Honda Fit Hybrid RS 1490 CC 2,695,000 2,981,750
10 BMW X5 XDRIVE 40 E 1997 CC 7,645,000 7,989,750

 

Vehicles That Will See the Highest Tax Increase According to the New Reforms:

No Vehicle Model Engine Size (CC) Previous Duty (Rs.) New Duty (Rs.) Duty Increase (Rs.)
1 Toyota Camry Hybrid 2500 CC 7,560,000 12,451,750 4,891,750
2 Mazda CX5 2490 CC 10,100,000 14,941,750 4,841,750
3 Mazda Axela Hybrid 1997 CC 3,730,000 7,989,750 4,259,750
4 Subaru Axela Hybrid 1997 CC 3,815,000 7,989,750 4,174,750
5 Honda CR-V 2490 CC 10,930,000 14,941,750 4,011,750
6 Toyota Prius Hybrid 2016 1790 CC 3,500,000 7,161,750 3,661,750
7 Nissan X-Trail Hybrid 1990 CC 4,320,000 7,961,750 3,641,750
8 Toyota Prius Hybrid 1790 CC 3,710,000 7,161,750 3,451,750
9 Toyota Land Cruiser Prado 2690 CC 12,725,000 16,141,750 3,416,750
10 Nissan X-Trail Hybrid 4WD 1990 CC 4,575,000 7,961,750 3,386,750

 

Vehicles That Will See the Biggest Tax Decrease According to the New Reforms:

No Vehicle Model Engine Size (CC) Previous Duty (Rs.) New Duty (Rs.) Duty Increase (Rs.)
1 Nissan Leaf Electric 80 kW 80 kW 3,050,000 2,000,000 -1,050,000
2 Nissan Leaf Electric 70 kW 70 kW 2,695,000 1,750,000 -945,000
3 Toyota Vitz 1290 CC 4,060,000 3,375,000 -685,000
4 Toyota Passo 990 CC 3,070,000 2,555,000 -515,000
5 Toyota Vitz 990 CC 3,100,000 2,585,000 -515,000
6 Honda Insight 1490 CC 3,480,000 2,981,750 -498,250
7 Honda CRX 2Door Hybrid 1490 CC 3,425,000 2,981,750 -443,250
8 Honda Vezel Hybrid 4W 1490 CC 3,660,000 3,230,000 -430,000
9 Suzuki Hustler Hybrid 650 CC 1,905,000 1,600,000 -305,000
10 Suzuki Wagon R Hybrid 650 CC 1,660,000 1,400,000 -260,000

 

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