Sri Lankan government to allow loans up to 90% of the value of electric cars
The government of Sri Lanka in its 2018 Budget has proposed to slash Loan to Value (LTV) ratios for car imports and will allow loans up to 90% of the value for electric vehicles and 70% of the value for hybrid cars.
Finance Minister Mangala Samaraweera has announced parliament that the 2018 Budget proposed the slashing of loans given to buy cars to 50% of the value from 70%.
However, Samaraweera has stated that the LTV ratio for motor cars will be relaxed.
The Finance Ministry in a statement has said the 2018 Budget has introduced an incentive structure to promote importation of vehicles powered by non-fossil fuel.
The Minister has said that loans could be provided by banks up to 50% of the value for petrol and diesel motor cars.
Minister Samaraweera has also introduced a new formula for import taxes on vehicles to be levied based on the engine capacity instead of the ad-valorem rate (CIF Value of the vehicle), rationalizing the tax base on vehicles.
According to reports, the Finance Ministry has said that tax concession announced in the budget for imported brand new electric car will be extended to cover the used electric cars, which are not more than one year old.
According to a Gazette notification issued by Finance Minister Mangala Samaraweera, the duty on used electric cars not more than one year old will be reduced by around Rs. 1 million, local news reports stated.
Accordingly, the duty rate applicable to electric vehicles less than one year old will be Rs 12,500.00 per KW of motors below 100 KW.
The move by the Sri Lankan government to provide incentive schemes to promote the purchase of electric and hybrid vehicles would create an increase in the demand for vehicles that do not operate on fossil fuels. This has opened up an opportunity in the vehicle market for the importation and sale of hybrid and electric vehicles in the country.
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