Business

Motor trader faces mass exodus with latest tax increases – CMTA

Published

4 years ago

2022/10/22

The Ceylon Motor Traders Association expresses serious concerns for the viability of the Motor Industry in the face of the latest increases in taxes proposed by the government. The government imposed a complete import suspension on all types of vehicles (two wheelers, three wheelers, passenger cars & commercial vehicles) in March 2020 citing that it will be for a period of 06 months. But even after 31 months, the core products of the industry are still suspended and the government has not provided any type of relief to the industry to date. Further, due to limitations in establishing LC’s over the last few months, the import of genuine spare parts also reduced, which directly impacted the after sales business, the key revenue line left for the motor companies.

Prior to the import ban, the membership of CMTA employed over 30,000 individuals while over 6,300 island-wide SME’s were managed as dealers, which fuelled the rural economy with over Rs. 2 Billion as dealer incentives. The CMTA members paid over Rs.6 Billion for outsourced services such as security, cleaning, logistics, storage etc, and facilitated vehicle finances of over Rs124 Billion, which sustained many jobs in several trades including leasing and insurance. The excise duty contribution from the motor trade was Rs.130 billion in 2019, which alone accounted for 6.8% of government revenue.

Charaka Perera, Chairman of CMTA said “Due to the import suspension, the motor trade has been crippled and has lost over 10,000 jobs during the last two years. Further, over 1,500 dealers, which were SME’s based island-wide, have closed down which has a direct impact on the rural economy. Stemming from the decline in business, the income of the employees has drastically reduced due to the lack of sales commissions and performance incentives while most of the CMTA Member companies have not been able to provide reasonable increments or bonuses to compensate for the increase in cost of living. In such a backdrop, the increase in inflation to over 64% has made it unsustainable to retain staff. Employees are moving out of the industry as well as out of the country, as they do not see a future within the motor industry. They can use the skills and experience gained to get sales and technical jobs in other countries. This is creating a severe talent drain for CMTA member companies and their operations are being hampered as a result”.

While the motor industry is facing such hardships, the impact of the announcement of the increased taxes for corporates and individuals would be unbearable to the motor trade as well as many other trades. Such a move would ensure a mass exodus of trained experienced employees, on whom the companies have heavily invested to train and who are not easily replaceable.

As such, the CMTA is requesting the government to focus on multiple solutions such as reduction of government expenditure, increasing efficiency of SOEs, increasing the tax payer base and strengthening the tax collection systems, which would negate the requirement to drastically increase taxes for already tax paying corporates and salaried employees.

Founded in 1919, the Ceylon Motor Traders Association (CMTA) is the only trade body that represents global vehicle manufacturers through their locally appointed franchise holders (commonly called ‘Local agents/ Distributors’). CMTA is affiliated to the Ceylon Chamber of Commerce and is the most senior automotive trade association in the region. The members of the CMTA while bringing in international best practices in engineering and management, collectively employ and train thousands of Sri Lankan citizens, developing a talent pool that is trained and employable internationally.

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Business

ADB approves $100 million loan to boost skills development and jobs for youth in Sri Lanka

Published

60 mins ago

2026/10/2

Thilina Walpola

The Asian Development Bank (ADB) has approved a $100 million results-based loan to help Sri Lanka transform its technical and vocational education and training (TVET) system, equip more young people with industry-relevant skills, and strengthen the country’s competitiveness and inclusive growth.

The Skills Development System Transformation Program will support the Government of Sri Lanka’s efforts in improving the quality and relevance of skills training, strengthening links between training providers and industries, and expanding employment opportunities for youth. The program will increase women’s employment opportunities in nontraditional jobs in fields including automotive technology, engineering, information and communications technology, construction, and renewable energy.

“A skilled workforce is essential to Sri Lanka’s long-term economic transformation and competitiveness,” said ADB Country Director for Sri Lanka Shannon Cowlin. “This program will help create stronger pathways from education to employment by making training more responsive to industry needs, expanding opportunities for young people and women, and ensuring that graduates have the skills required by a modern and evolving economy.”

Though Sri Lanka’s economy is recovering, it faces skills shortages in priority sectors, high youth unemployment, and low female labor force participation. Many employers report difficulty finding workers with the skills needed in a changing economy.

Aligned with the Government of Sri Lanka’s Technical and Vocational Education and Training Sector Strategic Framework 2026–2035, the nationwide program will be implemented from 2027 to 2031 and is expected to directly benefit more than 100,000 young people through improved access to quality, employment-oriented training.

Business

USD 40.84m pipeline to secure aviation fuel supplies to BIA

Published

1 hour ago

2026/10/2

Thilina Walpola

By Ifham Nizam

The government has cleared a USD 40.84 million and Rs. 8,548.75 million contract to build a dedicated aviation fuel pipeline from Muthurajawela to Bandaranaike International Airport (BIA), alongside a massive new fuel storage facility with a capacity of 92,000 cubic metres.

Energy Minister Anura Karunatilaka said the project represented a major investment in strengthening the infrastructure underpinning Sri Lanka’s aviation fuel supply and ensuring more reliable fuel availability at the country’s main international airport.

‘This project will provide the infrastructure required to strengthen the reliability and continuity of aviation fuel supplies to Bandaranaike International Airport, Karunatilaka said.

The contract has been awarded to China Petroleum Pipeline Engineering Company Limited, following an international competitive procurement process in which three bids were received.

The project will see a new aviation fuel storage tank complex constructed at Muthurajawela, together with the associated infrastructure required for handling and transferring aviation fuel.

Business

CSE activity up, turnover weak at Rs. 1.4 billion

Published

1 hour ago

2026/10/2

Thilina Walpola

By Hiran H Senewiratne

Trading activity on the Colombo Stock Exchange (CSE) gathered pace yesterday as global fuel prices began to show signs of easing, according to market analysts.In this context, both indices moved upwards. All Share Price Index up by 67.97 points while S and P SL20 up by 8.30 points.

Turnover stood at Rs 1.4 billion with seven crossings. Those crossings were reported in Sampath Bank 1.7 million shares crossed to the tune of Rs 238 million and its share price traded at Rs 140, Access Engineering two million shares crossed to the tune of Rs 159 million and its share price traded at Rs 79.50, LOLC one million shares crossed to the tune of Rs 129 million and its share price traded at Rs 129, HNB 100,000 shares crossed to the tune of Rs 38.4 million and its share price traded at Rs 384, JKH 1.9 million shares crossed to the tune of Rs 35 million and its share price traded at Rs 18.60, Hayleys 100,000 shares crossed to the tune of Rs 22.50 million and its share price traded at Rs 225 and Richard Pieris 847,000 shares crossed to the tune of Rs 22 million and its share price traded at Rs 25.50.

In the retail market top seven companies that have mainly contributed to the turnover were Sampath Bank Rs 114 million (813,000 shares traded), JKH Rs 100 million (5.3 million shares traded) LB Finance Rs 49 million (325,000 shares traded), HNB Finance Rs 30 million (27 million shares traded), HNB Rs 27 million (70000 shares traded), NTB Rs 25 million (82000 shares traded ) and Lanka IOC Rs 21 million (666,000 shares traded). During the day 65 million shares volumes changed hands in 10433 transactions.

The Banking and manufacturing sector counters performed well. In the banking sector Sampath Bank let the market while manufacturing sector especially JKH also significantly performed well. With the fuel revision Land IOC also a significant stock at the floor.

Meanwhile, First Capital Treasuries said that Ramesh Schaffter resigned as a Non-Independent Non-Executive Director with effect from October 1, to facilitate the restructuring of the company’s board.

Yesterday the Central Bank announced the US Dollar rate as against rupee. The rupee was quoted flat at Rs 330.65/80 to the US dollar in the spot market , while bond yields dropped, dealers said.