The Ceylon Motor Traders Association (CMTA) sought the assistance of the government to overcome difficulties car importers faced in four areas: in curtailing the implementation of ‘ad-hoc’ policy, creating a level playing field, ensuring transparency in the levying of customs duty and by giving due recognition to the CMTA.
“The growth of the industry is closely linked to the growth of the National Economy. The years that the industry has contracted, have been years that the national economy has been plagued with balance of payment deficits. History shows that the industry grows when the national economy grows. The industry can record sustainable growth only if the economy is also recording sustainable growth,” Sheran Fernando, the outgoing CMTA President told the centenary AGM held recently in Colombo.
“The IMF predicts the world economy to decline. Some economists quote a possible decline of global growth to be as much as 10%. In Sri Lanka, economists are forecasting declines in growth of around 2%. Given this scenario, the automotive industry needs to exert patience and resilience. The industry should explore means of achieving sustainability, and coping with the ban on import of motor vehicles,” he said.
The sudden ban on vehicle imports has created an issue where its members have vehicles that were on order at the point of the imposition of the ban and converting LC’s to 365 days credit is not possible when dealing with the manufacturer as their business processes do not allow for changes to terms of trade on an ad-hoc basis. This could lead to banks not honouring confirmed irrevocable LC’s which brings the trading reputation of the country and our banks into jeopardy disallowing the import of selected spare parts, causing significant strife to its members, Fernando pointed out.
He noted that CMTA members were respected corporates, ensuring their dues to the department of Inland Revenue (IRD) with statutory obligations fully paid and fully compliant with required disclosure to their Registrar of Companies under the Companies Act. “If the Government requires that all motor vehicle importers have to be ‘registered’ and makes the above compliance a requirement for registration, this would ensure all importers were competing under the same set of rules. This registration could also ensure that consumers were adequately protected.”
Fernando said transparency of custom duty is invaluable for a level playing field within the industry. Value based taxation can be manipulated, and a duty regime that safeguards circumvention will ensure a more level playing field within the industry, he said.
Fernando added that the CMTA sought recognition and engagement with the Government on policy related areas.
(MFJ)
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