Vehicle import curbs have failed to cut Customs revenue as Sri Lanka’s latest data shows imports still driving over 30% of revenue.
Vehicle import curbs have not delivered the foreign exchange savings the government expected, with Sri Lanka Customs data revealing a very different reality.
Although the government hoped to preserve foreign exchange by restricting vehicle imports under its current economic strategy, the latest figures show that this expectation has not yet been fulfilled.
The government expected vehicle imports to fall sharply following the tax policies introduced by the Ministry of Finance.
However, the practical situation appears to be different from what policymakers anticipated.
Policy Expectations
According to Customs Media Spokesperson and Director General Chandana Punchihewa, the Ministry of Finance has not imposed a complete ban on vehicle imports.
Instead, a surcharge has been introduced in addition to the existing customs duties.
Through this measure, the government and the Ministry of Finance expected to significantly discourage the importation of vehicles into the country.
They also expected customs revenue from vehicle imports to drop sharply in 2026 compared to 2025.
The policy was designed as part of a broader effort to reduce pressure on foreign exchange reserves and limit dollar outflows linked to vehicle purchases.
What Customs Data Shows
However, Sri Lanka Customs data shows that more than 30% of total Customs revenue still comes from vehicle imports.
This percentage remains very similar to the level recorded in 2025.
In January 2026, Customs earned Rs. 91 billion from vehicle imports, while total Customs revenue stood at Rs. 235 billion.
In February, vehicle import revenue was Rs. 75 billion, while total Customs revenue was Rs. 215 billion.
In March, vehicle import revenue stood at Rs. 77 billion.
In April, the figure increased to Rs. 84 billion.
By May 28, vehicle import revenue had already reached Rs. 76 billion.
These figures indicate that between 30% and 35% of Customs revenue each month continues to depend on vehicle imports.
The Director General of Customs has also stated that a large number of imported vehicles can still be seen in the market.
A significant portion of those vehicles reportedly remains unsold.
Why Revenue Has Not Fallen
The key question is why Customs revenue has remained high despite measures introduced to restrict imports.
According to Customs officials, two main reasons have contributed to this situation.
The first is the appreciation of the US dollar against the Sri Lankan rupee.
As the rupee has weakened against the dollar, the rupee-denominated value of imported vehicles has increased.
The second reason is the rise in the tax amount collected per vehicle.
Although the number of imported vehicles may have declined to some extent, the tax collected on each vehicle has increased because of the higher rupee value and the surcharge imposed by the government.
As a result, total rupee revenue has not dropped in the manner originally expected.
This raises a serious economic question.
Has the government’s tax surcharge truly controlled demand for imported vehicles?
Or has currency depreciation simply increased the rupee value of imports, allowing Customs revenue figures to remain high even without a meaningful reduction in the import process?
The available data suggests that achieving the government’s expected economic objectives through import restrictions may require a stricter and more effective approach than the current tax policy.
