Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando has issued a special clarification regarding the recently imposed 50% surcharge on vehicle imports.
He made these remarks while addressing a special press conference held at the Department of Government Information today (16).
The Deputy Minister stated that import expenditure had increased sharply over the past two months, prompting the government to introduce the measure temporarily in order to manage the country’s foreign reserves.
Emphasizing that the move is neither a ban nor a permanent restriction on vehicle imports, Dr. Fernando noted that the surcharge would remain in effect for only three months.
He added that individuals wishing to import vehicles immediately would be required to pay the additional surcharge.
He further pointed out that importers who are able to postpone vehicle imports for three months could avoid the additional cost.
“We are currently facing a challenge as import expenditure has increased by more than USD 2 billion over the past two months. In addition, Letters of Credit (LCs) for vehicle imports were being opened at a very rapid pace recently. Therefore, we decided to increase taxes for a three-month period on vehicles imported for personal use.”
He said the objective of the measure was to encourage the public, where possible, to postpone importing vehicles for personal use during the three-month period, adding that the move was not intended to permanently increase prices.
“If we had imposed a complete ban, those with an essential requirement would have been unable to import vehicles at all,” he said.
He further said that, “What has actually been imposed is a 50% surcharge on the existing 30% customs duty. Accordingly, the effective increase amounts to only 15%. Claims that vehicle prices will rise by 50% are completely misleading. Such an increase will not occur.”
“Even if there is an increase, it would amount to only 15%, and that additional cost would apply only to those who are unable to postpone imports for the next three months. It will not have a broad impact on overall market prices,” he added.
