Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando yesterday clarified that the recently imposed 50% surcharge on vehicle imports was a temporary measure introduced to ease pressure on the country’s foreign reserves amid a sharp rise in import expenditure.
Addressing a special press conference held at the Department of Government Information, Dr. Fernando stressed that the move was neither a vehicle import ban nor a permanent restriction, noting that the surcharge would remain in effect only for a period of three months.
He said the Government had decided to introduce the temporary surcharge after import expenditure increased by more than USD 2 billion over the past two months, while Letters of Credit (LCs) for vehicle imports had also been opened at a rapid pace.
“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 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.
Dr. Fernando said individuals who wished to immediately import vehicles would have to bear the additional surcharge, while those who were able to delay imports for three months could avoid the extra cost altogether.
He further emphasised that the objective of the measure was to encourage the public, where possible, to postpone personal vehicle imports during the three-month period rather than permanently increasing vehicle prices.
“If we had imposed a complete ban, those with an essential requirement would have been unable to import vehicles at all,” he said.
Clarifying concerns regarding the impact on vehicle prices, Dr. Fernando said claims that prices would increase by 50% were misleading.
“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,” he said.
“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.
