Jul 21, 2021

Rs 3 b revenue loss as customs levies low tax on Smart cabs

The government has suffered a staggering revenue loss amounting to Rs three billion due to the low tax levied by the Customs when Smart cabs imported to the country.

This has been revealed at the Committee of Public Accounts which has observed that when the Toyota Hilux Smart Cabs were imported by the Customs, levying less customs duties intended for singles cabs,  a loss of Rs 3 billion had occurred at Rs 01 million for each of the 3000 vehicles.

The Committee has observed that a large amount of tax income is lost to the government due to the tax irregularities occurred in the importation of vehicles by the Customs and the registration of these vehicles with the Department of Motor Traffic, said a release issued by the parliament media unit.

These observations are contained in the first report of the Committee on Public Accounts for the first session of the 9th Parliament which was presented by COPA chairman Prof.Tissa Vitarana on July 20 in the Parliament.

According to the report, vehicles imported by the Customs for special purposes at a lower tax rate are registered with the Department of Motor Traffic as dual-purpose vehicles.

In addition, during the period 2010-2019, 44 vans were imported as special purpose vans with a lower tax rate and subsequently registered with the Department of Motor Traffic as dual-purpose vehicles for the purpose of transporting passengers and goods and due to this process government has lost at least 1300 million rupees in taxes.

The report further observes that the government has lost Rs. 56 million in taxes due to the Toyota Land Cruiser not being properly cleared by the Customs under the passenger transport category. It has been  revealed that  the Toyota Land Cruiser luxury vehicle imported by fixing public address system and charging only a duty of Rs.1.5 million under the special purpose vehicle had been cleared under the category of transport of passengers where a duty of approximately Rs.56 million should have been charged. 

The committee has also observed that in order to avert the irregularities occurring, in the importation of special purpose vehicles the vehicles cleared under Harmonized System Code (HS code) no 8705 by the Customs should be registered with the Department of Motor Traffic under a special number (PZA) .