Government Denies Claims of Massive Vehicle Price Hike After New Import Tax

Deputy Finance Minister Dr. Anil Jayantha has urged the public not to be misled by claims that vehicle prices will rise sharply following the Government’s latest decision to impose additional taxes on vehicle imports.

Addressing the issue, Dr. Jayantha said reports suggesting vehicle prices would increase by 150% were “completely false” and based on misunderstandings about the new surcharge mechanism.

He explained that the measure is a temporary three-month surcharge introduced to delay non-essential private vehicle imports and reduce pressure on Sri Lanka’s foreign exchange reserves during a period of economic uncertainty.

“The message we are giving is simple: if you can postpone importing a vehicle for personal use, please do so. This is not a move intended to increase vehicle prices,” he said.

According to the Deputy Minister, the new measure does not translate into a direct 150% increase in taxes or vehicle prices. He noted that existing taxes on vehicle imports are already around 130%, and public discussions have misinterpreted how the new surcharge will be applied.

Dr. Jayantha also clarified that vehicles imported under Letters of Credit (LCs) opened on or before May 15, 2026, will not be affected by the surcharge.

“Even if those vehicles arrive months later, they will continue to be taxed under the previous rates. The new tax structure only applies to LCs opened after May 15,” he stated.

He stressed that consumers should not rush into purchasing vehicles out of fear of rising prices, warning that some parties may attempt to exploit public confusion to boost sales.

The Deputy Minister further noted that motorcycles, three-wheelers, and commercial-use vehicles are exempt from the temporary surcharge.

According to Dr. Jayantha, the Government’s objective is to manage foreign exchange pressures, maintain economic stability, and curb unnecessary import demand during the three-month period.