📈 Govt. Imposes Temporary 50% Vehicle Import Surcharge to Protect Reserves

The Sri Lankan government has introduced a temporary 50% surcharge on existing Customs Import Duties for imported vehicles, effective from 16 May 2026, to curb non-essential imports and ease pressure on foreign exchange reserves. • Policy Details & Timeline: The additional surcharge is valid for a period of three months. It applies to existing Customs Import Duty rates on both General and Preferential bases (e.g., a 30% duty will now face an additional surcharge on top of that rate). • Exemptions & Clarifications: Vehicles imported under Letters of Credit (LCs) opened on or before 15 May 2026 are exempt from the surcharge. Additionally, motorcycles, three-wheelers, and vehicles imported for commercial purposes are completely excluded. • Impacted Categories: The measure covers passenger motor cars, buses, jeeps, vans, goods transport vehicles, ambulances, as well as electric and hybrid vehicles. • Economic Context: Deputy Finance Minister Dr. Anil Jayantha Fernando clarified that existing vehicle import taxes already stand at approximately 130%. He refuted public claims of a 150% price spike, emphasizing that the surcharge is a temporary demand-management tool to safeguard national macroeconomic stability rather than a permanent price hike.