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Fri, 14 December 2018 21:48:12
Tax free racing cars to boost agriculture
13 Nov, 2012 14:33:34
By Namal Suvendra
Nov 13, 2012 (LBO) - Sri Lanka's move to allow tax free racing cars may sound like a pacifier for the rich kids of politicians, but the move could actually be aimed at cultivating a new culture to improve farm-related transport.
The 2013 budget took away the 300 percent tax on super luxury racing cars while slapping an additional tax on farm machinery including tractors. This may seem bizarre to ordinary folk but a deeper analysis reveals true genius behind the new tax logic.

One of the best racing cars of all time, the Lamborghini, started off as a tractor made with World War II military surplus. The Lambo Murcielago and the Diablo have strong agricultural DNA dating back to the 1951 farm tractor.

Realistically, a racing car is not going to be used every day, in fact it is most likely to be used only at night. That too, only when night races are underway in Colombo. At other times, however, the 630 horse power (6.5 litre V12) engine could be coupled to an electricity generator that could light up an entire town in rural Sri Lanka.

Attaching a plough to a Lambo is also not a problem either and the light-weight all-wheel drive sports car is a much better machine than the ultra-heavy Swaraj tractors already on the market. That is probably why purpose-built tractors have been slapped with an additional tax of about half a million rupees in the latest budget.

The sports car conversion to a multi-use machine can also create tremendous job opportunities for hotel staff who have no work when Colombo roads are closed for night races.

Remnants of the Eelam War IV such as components from bombed armoured cars could also be used as after-market add-ons to give a true Sri Lankan touch to Italian race icons.

We always knew that Treasury Secretary was brilliant at making the annual budget, but this is sheer genius.

Click below to read more stories by our Paradise Isle correspondent

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31. Father Feb 06
What a dumb**** of a writer!
30. Nilesh Moujood Nov 19
Dear Shammi and all those who think that there are no Lambo racing cars, LBO please publish the picture from the link below:

The government has since clarified that the excise tax free import will be for single seater racing cars and go carts. You can remove the passenger seat and bring it as a single-seater sports car. Very much like Micro who imports the Korando without seats and fits them here and claim that the vehicle is "assembled" in Sri Lanka! Way to go Lanka. You can also ask Micro to do a version of the Lambo sports cars that are assembled in Sri Lanka. Then the price can be even lower and all patriotic citizens will buy the "locally-made" Lambo!

29. racing man Nov 18
People in this country are so ignorant or at least pretending to be ignorant for the sake of inability to digest certain things...... they don't know what is a "racing car" and a "normal sports car........ there is a category of called "super luxury racing cars" ????? lol
28. Nilantha Ragen Nov 18

This attracts more visitors and foreign tourists than Colombo night car races.

27. shammi Nov 17
Who says lambo is a racing car...., its an expensive sports car... if the LBO cant understand this.. please do some research.... there are more powereful modified road cars in sri lanka, google about mitsubishi evo, subaru impreza sti, nissan skyline gtr, etc.. But what government did was wrong... removing the tax will improve the sports but its really hard to imagine there will be a good income from that... what they should have done is remove tax from racing cars. along with agricultural machinary taxes...
26. Rohana Perera Nov 16
Sorry Andrew C, the daily News story you mentioned is not a cogent argument for lifting taxes on racing cars. If motor sports is the argument, then I am compelled to ask why not motorcycles. there are annual bajaj races for three wheelers. This event attracts more people than the Colombo night races. So will the government extend this motorcar racing logic to sporty auto rickshaws. Surely, the three-wheeler race will be more exotic for tourists than Sri Lanka road races.
25. AndrewC Nov 16
Read the link to understand what this concession is all about!
24. Senok Motors Nov 15
These taxes show the wisdom of our government.
Incidence of diabetes is rising so the government jacked up the price of bread. Tax on smoke was increased to curtail rising incidence of respiratory conditions. Similarly alcohol price was increased to save livers of the masses.
23. DS Nov 14
In addition to the benefits to agriculture, the tax reduction on racing cars can reduce the cost of infrastructure in the country as well.

For example, it takes over 3 hours to get to Kandy from Colombo in a normal car. A racing car will get you there much faster. But at a fraction of the cost of building a highway from Colombo to Kandy.

22. Nilantha Ragen Nov 14
Dear Andre C
The number of seats in the car is not the issue. The president in his speech to parliament (there may be a variance in what he actually said and what is in the printed speech, but we should be only guided by the version published in Hansard of parliament). From what I can gather from this discussion, no one objects to taxes being lifted from racing cars, whether they have one seat or many.

The issue is that the government has the audacity to allow duty free racing cars at a time when it has raised the tax on a three-wheelers (the most favourite mode of transport of the common citizen), raised taxes on motorcycles, all cars below 1,000 cc (incidentally, the Tata Nano will cost 250,000 rupees more) as a result of the new tax structure. This new excise tax was not announced in the budget, but it is being implemented by the customs from November 9. A Maruti 800 costs an additional 200,000 rupees, a 4-wheel farm tractor costs an additional 500,000 rupees, a bus costs over one million rupees extra.

I am shocked and surprised that none of the so called mainstream business newspapers have reported on these new taxes that were raised without any formal announcement to the public. LBO too has been silent on this, probably they have been asked not to report these new taxes. I really don't care if the Andrew C and his ilk takes to the highway and have fun in their new single-seater racing cars, but why should I as a tax payer carry their burden.

Tourism argument: I am sorry, but I fail to understand the sports tourism argument of the race car lobby. India, despite its first F1 races, was unable to attract any racing enthusiasts to visit the country, but the new-rich bumpkins of Colombo seem to think that foreigners will flock to see them flaunt their (very often ill-gotten) wealth by way of racing Lambos. If you can afford motor sports, surely you can afford the tax on such cars. This is the same logic the government applied when raising road taxes by 1,500 rupees (This again is another conspiracy of the local media to hide these increases from the public). If you can afford a car, surely you can afford the road tax!

21. Kapila Nov 14
Ha ha most amusing.
20. kawdaboy Nov 14
Mitusbishi Lance road car + competition suspension + competition brakes + roller cage, twin ceramic intercooler turbo engine (over 1.5 bar) + competition wheels & tyres + roller cage + reinforced chassis = racing car. Remove the racing bits it’s a road car.

On the other hand a body kitted Mitsubishi Evo with a 'few' modification arrives at the harbor. How will our customs chappies know a fire breathing Mitsubishi Evo from an ordinary garden variety Mitsubishi Lancer? Hmmmmm……………

19. AndrewC Nov 14
Bri Nallappa im fully aware of what racing cars are and the different type's of car's that run world circuits. If you can actually then you would understand that the new tax concession is for 'single seater' and 'open wheel race cars' only.

They are not planning on bringing down Lambo race cars anytime soon! Im fully aware that they exist. Its readers like you, that comment on subjects they don't understand, and are the same as a backseat driver.

18. BKVWHK Nov 14
I think this kind of cynicism is out of place in LBO. It will damage its credibility, and should be avoided where egos allow.
17. Bri Nallappa Nov 14
For those who fail to understand that Lambo makes racing cars, please go to the following link. I hope LBP publishes the picture so that readers (like Andrew C) can see the picture.

16. Gas Guzzler Nov 14
Andrew C. Thank you for your response. I appreciate you standing up for motor sports, but the issue is not a tax concession for racing cars, but the principle behind it. I am appalled that you object to tax concessions for hybrid vehicles on the basis that a lot of people will import these vehicles.

We might as allow the import of Rolls Royce cars duty free because not many will import these anyway, and it will be good to show off these cars to tourists. Like the Burj al-Arab in Dubai, we can have a fleet of Rolls Royce cars parked outside the Galle Face Hotel.

15. AndrewC Nov 14
Rohana Perera you clearly have no idea about motorsport and what it entails. You also clearly do not know anything about vehicles in general. There are no 'fancy racing cars' being exempted from duty. These are basic 'Single Seater' or 'Open Wheel Racing' vehicles.

Simply put, they are very basic Formula's and if you read my comment properly you will understand its cost and availability. The lifting of tax concessions does not mean a lot of revenue is lost for the government due to the single seaters being brought down. what part of that did you not understand? If they allow more concessions on reconditioned or hybrid vehicles, the loss in revenue is colossal.

You also do not have any idea as to the amount of people that did turn up to the Night Race last year, the fact that 29 camera's were in operation, that it was the biggest local sporting event ever broadcast on live television IN Sri Lanka and the most attended local event too.

If you still don't understand then send me your email and i will forward you the Media Briefing PDF with all the data verified and broken down. And once again you talk as if the whole of Sri Lanka will be 'Burning Fuel' in fancy race cars... do your damn home work before commenting! These are not fancy car's, there are only 200 SLAS approved racing licenses and not everyone drives a single seater/formula on the race track!!!

14. Michael Sappaththumaker Nov 14
Judging by some of the comments here, the score is irony 1, sense of humour 0.

A refreshing dose of humour from LBO!
Welcome 1% economic to Sri Lanka.

I have a feeling that the real reason for this particularly amusing and head scratching tax deduction will reveal it self in time.

You can be pretty sure that's its not in the noble pursuit of encouraging the motor sports in Sri Lanka. I would be unsurprised if it's actually for the benefit of a select few in the upper echelon of power to import something special for themselves.

If it actually does work to help motor sport though, I would be extremely pleased though and be glad to eat a small hat made of cheese.

13. I Bunkum Nov 14
I am grateful to Mr Namal Suwendra, for enlightening the real benefits of importing racing cars to the country and the wisdom demonstrated by the Treasury.

One cannot stick to the traditional methods in achieving economic development. We cannot rely on exports on tea, rubber, coconut and laced bras and jungis to make our country wealthy. We need to think out of the box. Open our minds to new and upcoming opportunities.

Sports, everyone knows is one of the biggest business in the country. And we are far behind our neighboring countries. Even India, where 50% of the population defecates in streets has a F1 racing track. What do we have? Not even a track suitable for bullock cart race.

With the expected influx of (my estimate is 1000 numbers minimum) high end racing cars, people will start building racing tracks. That will attract race organizers. Soon Bernie Ecclestone, CEO of FOM and FOA will visit Hambantota. Once the races started, we will have hotel built generating employment. And a whole eco system around races. Isn’t it better to have our girls working as sexy F1 Grid Girls than working 8 hours a day operating Juki machines?

Mr Suwendra also opened our eyes, how the machines could be used 24 X7. As he suggested we could generate much wanted electricity. It’s a praiseworthy suggestion to use cars for racing in the night and then use the same car for electricity generation during daytime. If we allow sufficient number of racing cars to import, we will be able to generate enough electricity for South India too. So Indian might even reconsider Kudankulam nuclear plant.

With the VAT concession for sportsman guests we will also see hotels and inbound operators promoting sports events. Starting next year we will see Carlton Football, Carlton Rugby, Carlton International, Carlton International Chess, Caroms, Netwball, Kabadi, Beach football, hand ball, softball, hand fight, kadu fight, chukgudu, polo, eleohat polo….Carlton International this and that. And we will all be able see these on CSN with the courtesy of SLT and Mobitel and SLIC.

We are on our way to be truly wonder of Asia.

I am thankful to LBO for publishing insightful articles of this nature.

12. Handy Nov 14
Dear Author(Namal Suvendra),
Do you think that the readers are in "Foolish Paradise"? This is bullshit. "Mewa konde bandapu cheennunta hondai". Pls write something valueable rather than wasting our time.Pls.
11. Farmer Nov 14
Maybe i've stared too long at the wrong budget, but I cant seem find a proposal that adds additional taxes on farm equipment. Aiyo!
10. Chan Nov 14
This whole debate smacks of hypocrisy. The proposal to promote racing cars as part of impetus to a sporting economy came from a man from the village and from Hambantota.

Had this come from the UNP citing the same theory of a sports economy the 'colombians' and the 'trying to be posh crowd' would have not uttered a word !

9. EXPAT Nov 14
Hmmm Intersting indeed :)
But it seems quite a few including the blogger himself are confused about "RACING CARS' and "SPORTS CARS".
The basic difference between the two is that in the developped world with proper laws and regulations, racing cars are not allowed on public roads.

The blogger talks of a Lambo racing car, which as far as my limited knowledge goes is actually a sports car. As an example the Bugati Veyron is the fastest sports car allowed on public roads.

However the McLarens and Ferrais in the F1 circuit are not allowed on public roads anywhere in the world (except when the F1 series goes to Monaco and Singapore where the race is held on the public streets).

Comments of Andrew C are interesting also. Wonder if he has been to the Yas MArina in Abu Dhabi where the recent F1 race was held. Over a 3 day period (1st - 3rd NOv) there was a major party for those who had tickets to the race with many international singers in attendance. (there were so many i forgot all who came like Kylie Minogue, Nickleback, Bieber, Eminem...)

Imagine Sri Lanka pulling off something like that LOL

8. Rohana Perera Nov 14
I love Andrew C's defence of the racing car tax exemption. but, I am sad that does not to see the irony of a government lifting taxes on fancy racing cars while slapping more taxes on agricultural vehicles, public transport busses, three-wheelers and scooters.

Andrew C argues that 300,000 people turned up for the last Colombo night races and somehow that justifies the duty free racing cars. Sorry Andrew. The race circuit cannot accommodate that many people.

Let’s assume that 300,000 tuned up for the races. How did they travel? If they all used 40 seater busses (all packed to capacity) then there would be 7,500 busses entering the city. If they travelled in 10-seater vans, then the number of vans required would be 30,000. There was absolutely no congestion or traffic block except the ones caused by the closure of a large section of down-town Colombo .

Yes Andrew, that did cause great inconvenience to the public.

One of the excellent things that this government did was to remove taxes on hybrid vehicles. However, that decision was reversed very quickly and there is no incentive for going green. Now we have gone a full circle. The incentives are for people who burn more fuel in their racing cars.

7. deiyyo sakki Nov 13
Whoever came up with this is sheer genius indeed!
6. Wadda Podda Nov 13
It's not 1st of April. A good on though.
5. Asa Nov 13
This is the most lame "excuse" article that I've ever seen on LBO..... It is quite hard to believe that those people who could afford racing cars, the super rich, would use it to plough paddy fields or use it as a multipurpose farm vehicle. Most super rich doent even bother about the hardships that farmers are going through. If they really want, govt could have reduced the tax on generators, tractors, farm vehicles etc.
4. Nicole Phillips Nov 13
Excellent analysis!!! :-D
3. AndrewC Nov 13
Lets put this into perspective first. The amount of individuals that hold a SLAS approved license is limited.The amount of Single Seater cars that could possibly be brought into this country is also limited. Maybe 40 at the most in the coming year, compared to the thousands upon thousands brought in for the used/reconditioned car business.

The amount of money that these concessions allow on the single seaters is not a high amount. You couldn't do anything with it. A basic Formula chassis from India, used and of later years, will cost maximum two million rupees right now. With the tax deduction your talking around a million. That million into forty cars is a pinch of salt for revenue lost. Compare that with a tax deduction in any other trade and you have your numbers.

The amount of revenue generated per race meet, be it colombo or outstation, will be of a much greater value when more cars are available. Its the development of a Sports Section to generate profit and create awareness for the future.

This is very much like the concessions allowed upon cricket in the early 90's to promote and elevate the game. That led us to a world cup and more school boy cricketers being able to purchase equipment to better themselves. Did you also know that last years Colombo Night Race was the largest ever event in Sri Lanka covered on Television? 300,000 spectators was the number given.

That is data verified and proved. You can look at this in many angles but for those that don't truly know the costs, profit or development of a sport such at motorsport its easy to become a backseat driver. The gains of allowing this sport to become a mainstay outweigh the consequences in my opinion. Yes you can argue that other trades and projects should also have been a part of tax deductions etc etc but you cannot deny that for anything to develop in this country there has to be a start.

For motorsport, we now have a chance. Without being critical about everything this country has or is striving to be, why can't a concession such as this be given to a small fraternity? I don't see a problem or issue. Its people that want to make a fuss about everything that highlighted this issue and have written/said all over their status's without truly knowing a thing.

Directly from the treasury website for the 2013 budget. Article 29.1 "I also propose to exempt go-carts and specially designed racing vehicles from the applicability of the Special Excise Provision Act to facilitate the availability of such instrument for such sports events."

If that be the case, how does it hurt for private entities to bring cars that are meant for the sole use of racing to Sri Lanka under a tax reduction? It would certainly help develop a sport in a country that used to have a rich heritage in the said sport. Look at India, Malaysia and even the Philippines... they have as bad if not worse problems in healthcare, transport and housing.

Yet, they can boast International race circuits that hold many meets on a monthly basis. Do you see everyone shouting and screaming? Cars brought into those countries have a similar tax deduction plan for racing. You got to start somewhere to get anywhere. Criticizing all the time isn't the way to go forward.. must be a Lankan trait hence we go backward...

2. CarBoy Nov 13
At least one person has guts to speak reality. Salute Namal Suvendra
1. anon Nov 13
A good one!!