The government has imposed a three-month 50% surcharge on the Customs Import Duty for vehicle imports

A 50% surcharge has been added to the Customs Import Duty on a wide range of personal vehicles for the next three months.

The surcharge will be effective from Saturday, May 16, according to a gazette notification issued by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning and Economic Development.

This surcharge will not be applied to vehicles for which Letters of Credit (LCs) were opened on or before May 15.

Context

The gazette notifying this additional surcharge was issued on Friday, May 15.

The surcharge has been imposed on passenger motor cars, buses, jeeps, vans, goods transport vehicles, ambulances, motor vehicles, and land vehicles.

It will be applied to imports under both general and preferential duty bases.

The surcharge

Deputy Minister of Finance and Planning Dr. Anil Jayantha clarified that the surcharge was intended to delay the import of non‑essential private vehicles for the next three months.

“This is not to stop people from buying vehicles, but to defer unnecessary importation of vehicles,” he said.

He added that the surcharge was intended to manage pressure on foreign exchange and reserves while maintaining economic stability, even as the rupee depreciates against the dollar.

Vehicle prices

Vehicle importers claimed that the prices of vehicles could increase significantly as a result of this surcharge.

“This surcharge will increase the prices of vehicles significantly. Many vehicles will increase by Rs. 1.5 to 2.5 million,” Arosha Rodrigo, the President of the Vehicle Importers Association of Sri Lanka claimed.

“The surcharge, coupled with currency fluctuations and the 2.5% Social Security Contribution Levy, will push the price of vehicles to a level where no one can afford them,” Rodrigo added.

Deputy Minister Jayantha refuted these claims, urging the public not to rush to purchase vehicles out of fear of price increases.

“What has been imposed is a 50% surcharge on the existing 30% Customs Import Duty, which will effectively increase the amount by only 15%. Claims that vehicle prices will rise by 50% are completely misleading,” he asserted.

“This additional cost would apply only to those who are unable to defer importing personal vehicles for the next three months. It will not have a significant impact on overall market prices,” Jayantha added.