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Luxury car tax and ban on government worker trades removed

The Sri Lankan government has declared that the ban on trading imported cars by public servants has now been lifted, allowing government officials to sell vehicles that they have imported.

The lifting of restrictions, announced under the 2013 budget, was announced by the Ministry of Finance, allowing public servants to trade their vehicles any time after importation, a practise that had reportedly been occurring underhand previously.

The announcement comes as the government also declared the previously existing 300% tax on luxury vehicles was also to be lifted, as part of the new budget.

The tax was infamously imposed on Oxfam in the aftermath of the 2004 Boxing Day Tsunami which killed tens of thousands on the island, as they brought in vehicles to aid relief work. Oxfam was reportedly given the choice of passing over the vehicles to the government, re-exporting them or paying the 300% import tax, leading to Sri Lanka coming under heavy criticism.

A case last year however, saw limousines being imported by a wealthy group of Sri Lankans avoid the “luxury” tax. Since the limousines had multiple seats, they were classified as “buses”.

The abolishment of this tax was accompanied by an additional tax being levied on farm machinery including tractors.

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