The Sri Lanka Vehicle Importers Association has warned that vehicle prices are set to skyrocket due to the government’s recent tax revisions. Association President Prasad Manage explained at a media conference that the existing 300% import tax on vehicles could increase to 400% or even 500%, with some models potentially seeing a 600% hike in taxes.
He attributed the surge in prices to a combination of four types of taxes, including a special import tax, luxury tax, value-added tax (VAT), and additional charges based on the vehicle’s value. For instance, the tax on a Wagon R, previously around Rs. 1.6 million, will rise to Rs. 1.8 million. Similarly, the tax on a Vitz model will increase from Rs. 2 million to Rs. 2.4 million, and Toyota Aqua, Corolla, and Axio models will see their taxes climb from Rs. 5.7 million to Rs. 6.6 million.
“The CIF value is calculated after adding these taxes, and then 18% VAT is imposed on top of that,” Manage explained, noting that the overall tax amount determines the final price of the vehicle.
When asked how this would affect market prices, Manage admitted that existing vehicle prices would increase slightly, although the public could expect a more significant rise once new vehicles arrive. He advised potential buyers to remain patient, stating, “Wait until the vehicles arrive in Sri Lanka.”
