It’s a Clear statement made by the Central Bank Governor of Srilanka that any country can’t continue the Balance of payment continuously without any reduction or control. If the Balance of Payment Deficit increases continuously without any proper action, it will lead a bigger risk to economy.
The increase of the Import taxes will reduce on the luxuries vehicle imports and reduce the cash outflows; it’s a good step to reduce foreign payment cash outflows.
Positive (Benefits) points of Tax Increase on Imported vehicles
- Reduce the foreign cash outflows
- Improve the local manufacturing and help to develop infant businesses in srilanka
- Reduce Traffics and increase usage of Public transport- which lead to higher quality service expectation of public transport
- Support Green Environment with lesser number of vehicles
Negative (Disadvantage) points of Tax Increase on imported vehicles
- Increase of cost of Living (Indirect cost to Public)
- Lesser Developments
- Over burden to Importers and final Vehicle consumers
- May lead to negative or opposition to government policy