Vehicle Import Surcharge Extension Expected to Push Prices Up by Up to Rs. 5 Million

Vehicle importers say the extension of the 50 percent surcharge on vehicle imports until December 31 will significantly increase the prices of vehicles imported under letters of credit opened after May 15.

According to the Sri Lanka Vehicle Importers Association, the additional surcharge could increase vehicle prices by between Rs. 1.5 million and Rs. 5 million, depending on the model.

The government has extended the surcharge under powers granted to the President by Section 10A of the Customs Ordinance, as amended by Act No. 83 of 1988. The surcharge, which was initially imposed for three months, was extended on May 15 and will remain in effect until December 31.

Vehicle importers had expected the government to refrain from extending the surcharge. However, they now warn that the extension will lead to higher prices for vehicles imported under letters of credit opened after May 15.

Sri Lanka Vehicle Importers Association Chairman Prasad Manage said vehicles imported under letters of credit opened before May 15 are not affected by the additional surcharge. Many dealers are currently selling vehicles imported under such letters of credit.

Importers estimate that the price of a Wagon R could increase by around Rs. 500,000, while a Toyota Raize could become about Rs. 1 million more expensive. Prices of Vezel models could rise by between Rs. 1.5 million and Rs. 2 million, while a Prado could increase by around Rs. 3 million and a Land Cruiser by approximately Rs. 5 million.

They further estimate that the price of a Yaris X Grade could rise to around Rs. 10.5 million, a Toyota Raize hybrid to approximately Rs. 15.5 million, and a Vezel Z Play to around Rs. 22.5 million.

Importers also expect the prices of cabs to increase by between Rs. 2 million and Rs. 2.5 million.

The industry has called for measures to prevent frequent vehicle price changes, saying that adopting alternative pricing mechanisms could help reduce fluctuations in the market.