Govt. gradually lifting vehicle import ban
The Sri Lankan government has announced a plan to lift the ban on vehicle imports in phases, imposed since March 2020 to conserve foreign exchange preventing another crisis in the economy.
Accordingly, the ban on more than 3,000 items, including vehicles, was imposed to stabilise the economy by controlling imports and reducing foreign currency outflow by the previous regime.
Now importation of public passenger vehicles, special purpose vehicles, and non-motorised goods is being permitted from October 1, 2024, while commercial transportation vehicles are allowed from December 1, 2024. Personal-use vehicles such as cars, vans, SUVs, and pickups will be allowed for import from February 1, 2025.
The government also intends to introduce annual licences for importers, manufacturers, and traders to regulate the market and ensure tax contributions. Imported vehicles must be registered within 90 days, with penalties for delays and excessive imports.
Already, the partial lifting of restrictions has led to significant changes in the pricing of vehicles. Vehicle import companies have begun to advertise, thereby forcing the reduction of prices in used vehicles.
This is a sure sign that prices of new imports are quoted lower than used ones-a situation that heralds instability in the market.
However, all these moves are affecting the market, warning of wild fluctuations in prices. Chairman, Ceylon Motor Trasers Association CMTA, Virann De Zoysa said.
He urged accountability on those indulging in such practices, for the need for a balanced policy that maximises state revenue with the importation of quality vehicles at an affordable price.
Mr. De Zoysa was also critical of the recent proposals to permit the import of vehicles up to seven years old, saying such vehicles would be costly to repair. He further said that a revision in the tax policy could ensure better quality vehicles at an affordable price.
President of the Vehicle Importers Association of Sri Lanka (VIAL), Indika Sampath Merinchige, said importers are ready to recommence imports by February 2025, once the government gives the green light.
Meanwhile, Toyota Lanka has restarted imports of buses and vans for the tourist sector and says more are in the pipeline. The price of a new Toyota is now significantly below that of second-hand models. New vans cost Rs.15 million while buses cost Rs.17 million. A used version of both categories costs around Rs. 20 million.
Vehicle importers are preparing for increased taxes on imported vehicles. Indications from the Ministry of Finance show that there will be increased taxes, hence a rise in the prices of vehicles.
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