The Sri Lankan automotive import sector is facing a significant shift following the government’s introduction of a 50% customs surcharge on vehicle imports, effective for three months starting May 16. The new measure, along with changes to the Social Security Contribution Levy (SSCL), is expected to drive up vehicle prices across the country.
Under the revised system, the 2.5% SSCL must now be paid upfront at the point of customs clearance. Previously, importers paid a lower rate of 1.25% only after a vehicle was sold. While the 50% surcharge applies only to Letters of Credit (LCs) opened after the May 16 deadline, industry observers say many dealerships have already begun adjusting prices on existing stock as the market prepares for the impact of the new structure.
Amid these developments, some importers are moving to maintain price stability for customers. Ismath Ali, Chairman of Ali Global Lanka (Pvt) Limited, said the company has instructed its sales team to avoid immediate price increases on current inventory.
For incoming shipments in June, the impact will depend on LC timing. Ali Global Lanka confirmed that around 70 incoming units, including popular models such as the Toyota Roomy, Yaris, and Axio, will be exempt from the 50% surcharge as their LCs were finalised prior to May 16. For these vehicles, the price increase will be limited to the mandatory 2.5% SSCL, adding around Rs. 300,000 per unit.
The company also said it will absorb additional costs on certain units where LCs could not be opened in time, rather than passing the surcharge on to buyers. It has also introduced a reservation system allowing customers to secure a vehicle and chassis number with a refundable Rs. 50,000 deposit, which is fully returned if the customer is dissatisfied after inspection at its Rajagiriya showroom.
As the three-month surcharge period begins, market analysts say the availability of vehicles imported under the previous tax regime will be a key factor in determining short-term price trends in the local market.