Vehicle prices in Sri Lanka are expected to surge significantly due to the government’s recent decision to increase taxes on imports by nearly 60%, according to vehicle importers. These higher taxes, combined with the already substantial VAT, will lead to a steep rise in the cost of vehicles. Importers estimate that vehicles brought under the new tax regime will see price hikes of around 20% compared to current rates.
The new tax structure will impose rates between 200% and 300% on vehicles that are not more than ten years old from the date of manufacture. This move comes as vehicle imports are set to resume gradually starting in February, after nearly five years of restrictions.
Industry experts warn that these increased taxes will make vehicle ownership less accessible for many Sri Lankans, while the higher cost of imported vehicles is likely to impact other sectors of the economy reliant on transportation. The reopening of the vehicle market under these conditions could also lead to reduced demand, further complicating the situation for importers and consumers alike.
