Union Parliament approved the proposal to lower the tax rate for untaxed incomes as from October 1, 2019. Thanks to the reduction of tax rate, there will be high demands for brand new cars and a chance for car owners to change the name of car owners at a reduced tax rate. The weekly Eleven picks it as the significant event of the year 2019. 

As from October 1, 2019-2020 fiscal year, the tax rate will be three per cent for untaxed income ranged between Ks1-100 million , five per cent between Ks above 100 million-300 million, ten per cent between Ks above 300 million- one billion, 15 per cent between Ks above one billion-Ks three billion and 30 per cent between Ks three billion and above. 

The old income tax rate was 15 per cent for up to Ks 30 million, 20 per cent between Ks above 30 million and Ks 100 million and 30 per cent for Ks 100 million and above. 

In the brand new auto market, local-made SKD car market will see development as buyers have to pay income tax plus vehicle registration fees. Thanks to the reduced income tax, the prices of the brand new cars imported under the CBU system will decline to a certain extent. In addition, the prices of second-hand Japan-made cars may decline slightly. 

Till August of this year, 12,441 brand new cars were sold out and 10,136 cars were manufactured. The auto sale increased by 25 per cent and the auto production, by 45 per cent, compared with the last year.

The prices of cars in the local market have skyrocketed as the incumbent government has tightened the car import policies since taking office. The car prices are not within the reach of most people. 

The prices of Toyota Vitz, Honda Fit, Mazda Demio, Suzuki Swift, and Toyota Probox increased from Ks 7-8 million in 2014 to Ks17-18 million in 2019. As the prices of vehicles may not decline significantly, most of the people’s dream of owning a car is still distant.