Annual Report 2008 - Ministry of Finance and Planning

2. Fiscal Developments - 2008
55
The main factor behind slower growth in excise duty
during 2007-2008 was the shortfall in revenue collected
from importation of motor vehicles. The declining trends
in importation of motor cars under the normal statutory
levies continued in 2008, recording a further drop of 19
percent in volume. The negative growth rate of 16 percent
recorded from excise duty in 2007, further deteriorated by
37 percent in 2008. Concessions offered to public servants
for importation of vehicles, declined volume and value in
motor cars and motor vehicles (goods transport and dual
purpose) under standard levies, and shift towards low value
small motor vehicles imported mainly from India and China
are the key factors for this extensive change. The import
restrictions applied by Central Bank of Sri Lanka through
Letter of Credit margins of 200 percent of value also had a
negative impact on motor vehicle import.
Table 2.8
Excise Duty Rate Revisions on Liquor
2006 Oct
Rs.
2007 March
Rs.
2007 Oct
Rs.
2008 Oct
Rs.
Change 2006
Oct - 2008 Oct (%)
Arrack (Per Proof litr) 421.00 446.00 510.00 560.00 33
Foreign Liquor (Per Proof litr) 550.00 575.00 640.00 690.00 25
Beer – less than 5% (Per litr) 37.50 37.50 38.00 48.00 28
Beer – more than 5% (Per litr) 53.50 53.50 54.00 64.00 20
Wine (Per Proof litr) 275.00 300.00 365.00 415.00 51
Source: Department of Fiscal Policy
Description
Table 2.9
Motor Vehicle Imports
Units
2007 2008
Tractors 27,621 32,128
Passenger Vans and Buses 2,461 1,289
Motor Cars (Three Wheelers, 70,292 56,981
Ambulances, Hearses etc) (a)
Motor Vehicles for Transport of 25,531 15,518
Goods (including dual purpose
Vans & Cabs etc.)
Special Purpose Motor Vehicles 527 472
Total 126,432 106,388
Table 2.10
Estimated Shortfall in Excise Duty Revenue
Rs. mn
Public Servants Concessionary Duty Scheme 10,062
Slow Down in Vehicle Imports 13,500
Slow Down in Liquor Sales 2,000
Slow Down in Cigarettes Sales 2,335
Total 27,897
Source: Department of Fiscal Policy
Source: Department of Sri Lanka Customs
(a) Excluding Concessionary Vehicles
Ministry of Finance and Planning Sri Lanka
Annual Report 2008