Switched Off

Mar 31, 2008 (LBO) – Sri Lanka has terminated a scheme that gave tax-slashed cars to state workers from today and no new applications would be entertained, the finance ministry said. State workers who have been issued tax slashed import permits but have not opened letters of credit by March 31 would not be able to open letters of credit to import vehicles.

However the permits could be used to buy a locally produced or assembled car.

State workers who have already applied and who qualify for the tax concession would be issued a permit to buy locally produced or assembled car, the finance ministry said in a statement.

Earlier reports said around 17,000 state-workers have applied to import tax-slashed cars.

In Sri Lanka state-workers also get tax free salaries and pensions. Taxes are deducted from private sector workers and their pension fund is also taxed.

After getting thousands of tax free cars, government officials raised vehicle taxes again this year.

Sri Lanka's politicians also get tax free luxury jeeps. Their salaries are also tax free. More than half the tax revenues of the government are spent on salaries and pensions of state workers.