New vehicle import policy devised to lift automobile ban soon

The Government has already prepared a comprehensive policy and guidelines to lift restrictions of all vehicle imports soon, Trade Minister Nalin Fernando disclosed.

Measures will be taken to allow motor traders to import all types of vehicles including private cars as the country was losing around Rs.300 billion in import tax revenue per year since March 2020, he said.

A special committee has been appointed recently by President Ranil Wickremesinghe to devise the policy and guidelines relating to vehicle imports, Finance Ministry sources confirmed.

The new vehicle import policy and guidelines will be presented to the cabinet of ministers for approval, a senior official of the ministry said adding that the future action to lift the import restrictions will be taken accordingly.

He said that the five-point approach to the relaxation of import restrictions had brought down the imposed restrictions on 3,300 HS codes except private vehicles to about 300 HS codes.

The new vehicle policy and guidelines will enable lifting the ban on private cars by considering the foreign exchange outflow as a percentage of other imported items, and the general demand for automobiles.  

He noted that if a situation arose which required the control of imports to protect domestic production, substitutes and foreign exchange, the Government would go for a tax or a licensing process to control the situation rather than re-imposing restrictions.

Government authorities must consult vehicle importers when making decisions on relaxing an ongoing import ban, President of the Vehicle Importers’ Association Indika Sampath Merinchige said.

He added that the authorities must convene industry representatives to formulate new laws or regulations with regard to vehicle importation.

He disclosed that letters of credit (LCs) of motor traders are not accepted by banks anywhere in the world now. We’ll have to change payment methods too,” he said.