Ministries barred from purchasing new vehicles

Government ministers have been directed not to purchase new vehicles to Ministries or for their official use as the Treasury has to handle new expenditure costs like compensation for flood victims and damages to their property running into billions of rupees, official sources said.

At Wednesday’s cabinet meeting, ministers were urged not to buy new vehicles as the country is suffering from damages caused to people and property in the recent floods.

The Cabinet has already approved several supplementary estimates running up to billions of rupees to import vehicles for several Ministries.

A supplementary estimate amounting to Rs.360 million to purchase vehicles for the Ministries of Defence, Finance, Rural Economy Deputy Minister and the Development Strategies and International Trade Minister was taken up for debate in Parliament recently.

The government allocates each cabinet, deputy and state minister with an official vehicle and two other vehicles as well as a vehicle permit. In addition, vehicles are also provided to the personal secretary, media secretary, the two coordinating secretaries and public relations officer of every minister.

Cabinet also approved a request to increase the maximum price of a vehicle by Rs. 8 million and provide funds for only one vehicle for a cabinet, state or deputy minister this year. The government had sought Parliamentary approval for another supplementary estimate to spend Rs.288.2 million to purchase vehicles for several ministers, deputy ministers and state ministers.

Meanwhile details pertaining 90 MPs transferring the ownership of vehicles imported by them under the tax free car permit scheme have been revealed. According to official data, those MPs had received tax exceptions amounting to over Rs. 30 million (each).

An MP is given a vehicle permit to import a vehicle with a value not exceeding US$62,500 (Rs. 10 million) and many of them used it to sell the vehicle permit. A tax relief of around Rs. 3.3 million will be given for an MP importing a Toyota Land Cruiser. In this vehicle permit transaction they earn around Rs. 30 million.

Many MPs sell the document with the permit while others import the vehicle, get it registered in their names and sell it to other parties causing a loss of around Rs. 3.3 million to the Treasury. At present MPs advertise their vehicle in websites and have started selling them, official sources said.

Re-introduction of the concessionary duty schemes on import of motor vehicles has negatively impacted on the government revenue, Treasury sources said. However Excise duty on motor vehicles increased by 8 per cent to Rs. 129.5 billion in 2017 due to increased vehicles’ imports by 2.1 per cent to 298,182 coupled with increased unit rates of excise duty rates on motor vehicles along with the government policy towards discouraging high emission vehicle imports.