Sri Lanka’s 2027 Budget has introduced several vehicle-related proposals, including incentives for electric vehicles, increased transport allowances for government officials and the digitalisation of vehicle registration services.
However, the Budget does not announce any new general reductions in import duties or excise taxes on cars, SUVs or motorcycles.
Presenting the Budget in Parliament, President Anura Kumara Dissanayake outlined several measures relating to vehicles and transport.
- Electric vehicle incentives
The government has proposed increasing the monthly allowance paid to eligible public officials who use fully electric private vehicles for official duties by 150%, effective July 2027.
- Transport allowance doubled
The monthly transport allowance for eligible executive officers who use their private vehicles for official duties is proposed to increase from Rs. 50,000 to Rs. 100,000.
- Digital vehicle registration
The government has allocated Rs. 700 million to establish a modern digital system for vehicle registration and ownership transfers, aimed at improving efficiency and transparency.
- New driver demerit points system
An allocation of Rs. 1.5 billion has been proposed to introduce a digital driver demerit points and road safety enforcement system, linking the Department of Motor Traffic and Sri Lanka Police.
- Department of Motor Traffic relocation
Another Rs. 600 million has been allocated to relocate the Department of Motor Traffic to Werahera to improve public services.
- Vehicle import taxes
Despite these proposals, the 2027 Budget does not specifically announce new reductions in vehicle import duties or excise taxes.
- Vehicle importers say prices unlikely to fall
Meanwhile, the Sri Lanka Vehicle Importers’ Association says vehicle prices are unlikely to decrease following the 2027 Budget, as no concessions were announced for vehicle imports.
Speaking to media, the association’s Vice President, Arosha Rodrigo, said importers had expected the government to provide some relief through the Budget but were disappointed that no changes were announced to vehicle import tax policies.
He said the association had also raised the matter with the Finance Ministry, which referred to concerns over the country’s foreign exchange reserves and the ongoing conflict in the Middle East.
Rodrigo said many prospective buyers had postponed purchasing vehicles in anticipation of possible tax concessions in the Budget.
However, with no new relief announced, he said vehicle prices were unlikely to decline under the prevailing tax structure. (Newswire)