Vehicle prices may rise as the rupee weakens and the Social Security Levy increases to 2.5%, Prasath Manage warns.
Vehicle prices are expected to rise in Sri Lanka as the rupee continues to depreciate against the dollar, Sri Lanka Vehicle Importers Association Chairman Prasath Manage has warned.
Manage said the weakening of the rupee is one of the key reasons why vehicle prices could increase in the future. His warning comes as importers and buyers continue to watch foreign exchange movements closely.
He also pointed to the increase of the Social Security Contribution Levy to 2.5 percent from May as another factor that could push vehicle prices upward.
The remarks raise concerns for buyers hoping to purchase imported vehicles, especially at a time when taxes, exchange rates, and government revenue expectations are all placing pressure on the market.
“The government expects a large revenue from vehicle imports. If my calculation is correct, they expect about 700 billion this time,” Prasath Manage said.
He stated that vehicle importers are among those providing more revenue to the government, especially through used cars.
“We are the ones who provide more revenue to the government. Especially from used cars,” he said.
Manage further explained that the government expects revenue of $1.5 per dollar, while importers pay taxes of $2 to $2.5 per dollar on the vehicles they import.
He also said that due to tax issues with some electric vehicle imports, the government receives even less revenue per dollar in certain cases.
“We have asked the government to analyse these matters,” he said.
According to Manage, since revenue from used cars is higher than what the government expects, it appears that the government is benefiting from the current import structure.
However, questions remain over how much of that tax burden will eventually be passed on to vehicle buyers.
“The Social Security Contribution Levy has become 2.5 percent from May. Foreign exchange rates have increased. Some increase in vehicle prices can be seen in the future,” he warned.
This raises concerns about affordability in Sri Lanka’s vehicle market, particularly for middle-income buyers who may already be struggling with high import costs, taxes, and exchange-rate pressure.
What happens next could be critical, as future vehicle prices may depend heavily on the rupee’s movement, tax policy, import revenue targets, and whether the government responds to concerns raised by vehicle importers.
