Saturday, 12 October 2019 09:50

Sri Lanka Carbon tax’on vehicles now on the balance

Sri Lanka Government is mulling to revise the proposed ‘carbon tax’ originally based on a complex criteria including the age of the vehicle, engine capacity, which had no direct connection to the actual use or burning of fuel, official sources confirmed.

The new tax was expected hit older cars owned by pensioners and the middle class persons, which were rarely used

It has been proposed lower taxes for cars owned by rich persons including owners of hybrids which were frequently in use on roads.

Finance Minister Mangala Samaraweera had decided to revise the basis heeding to public appeals, experts and difficulties in implementing the tax at the level of division secretaries, official sources said.

The cabinet had given the approval for the Finance Minister to change the basis at the committee stage of the debate, so that it is based more on fuel use.

Finance Minister Mangala Samaraweera told parliament on November 9 2017 he proposed to introduce a carbon tax with the applicable average rates for a motor cycle, car and a passenger bus being around 17 cents, Rs1.78 and Rs2.74 per day, respectively if they are below 5 years of age.

The carbon tax on vehicles is expected to raise Rs2.5 billion with the funds being spent to protect the environment, he said while presenting the government budget for 2018.

However the new carbon tax has not been enforced up to now due to several bottlenecks and complications, official sources said.


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