Sri Lanka, June 25 -- Sri Lanka's vehicle tax regime may be undermining the adoption of cleaner and more fuel-efficient vehicles, with a policy proposal submitted to the government calling for a fundamental shift away from engine-capacity-based taxation towards a progressive value-based system.
The proposal, submitted by the Advocata Institute in response to Finance Ministry's call for revenue enhancement measures, argued that the current framework creates market distortions, penalises modern hybrid technology and influences consumer purchasing decisions in ways that may be economically inefficient.
"Engine displacement, in particular, is an imperfect proxy for engine performance, as advances in engineering allow vehicles with similar eng...