Vehicle prices in Sri Lanka are expected to climb sharply following the government’s decision to extend the 50% surcharge on import duties until December 31, which had previously been due to expire on August 15.

According to the Vehicle Importers Association of Sri Lanka (VIASL), the extension will push up showroom prices significantly. 

A Suzuki Wagon R is expected to increase by around Rs. 500,000, a Toyota Raize by Rs. 1 million, a Honda Vezel by Rs. 1.5–2 million, a Toyota Prado by Rs. 3 million, a Land Cruiser by Rs. 5 million, and a double cab by Rs. 2–2.5 million.

Association President Prasad Manage told the media that vehicles currently available in showrooms were imported under Letters of Credit (LCs) opened before May 15, which are exempt from the surcharge. 

However, vehicles imported under LCs opened after May 15 will be subject to the higher duty, leading to price hikes.

“We expected the surcharge would not be extended, but due to various reasons it has been continued. As a result, we can expect further increases in vehicle prices,” Manage said. 

He noted that 90% of vehicles cleared so far were under LCs not subject to the surcharge, but clearing has now begun on vehicles that do fall under the new duty.

Manage added that instead of repeated price changes through surcharges, the government could use alternative tools to stabilize the market, such as revising tax policy, controlling LCs, and implementing fixed rates. 

He warned that continuous surcharges create large fluctuations in the market, while other mechanisms could restrict imports if necessary without causing excessive pricing. (Newswire)

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The Vehicle Importers Association of Sri Lanka (VIASL) has cautioned that prices of imported used vehicles are set to rise steeply following the removal of the 15 percent valuation reduction previously applied when calculating Customs values.

Addressing the media, VIASL Vice President and spokesperson Arosha Rodrigo said the change will ripple across the market, with popular models facing sharp increases. 

A Honda Vezel Z Play SUV could cost around Rs. 2 million more, while a Suzuki Wagon R may rise by about Rs. 700,000, he noted.

Rodrigo explained that the increase stems from revisions to the Customs valuation methodology. Under Gazette Extraordinary No. 1971/10 of June 14, 2016, two methods were prescribed: Section 1(A) for brand‑new vehicles and Section 1(B) for all other vehicles, including used imports.

Authorities have long argued that the 15 percent reduction amounted to a concession, allowing vehicles first registered overseas as “new” to later qualify as “used” imports, thereby reducing government revenue. But VIASL countered that the adjustment was introduced by the Ministry of Finance to reflect the actual transaction value of vehicles rather than inflated retail prices.

The Association stressed that retail prices often include dealer margins, local taxes, and overheads, while bulk discounts and negotiated rates in international trade mean the final purchase price is usually lower. The reduction, it said, was not a special concession but a mechanism to align Customs values with real costs borne by importers.

Warning of the fallout, VIASL said higher Customs values will directly increase import duties and taxes, pushing up consumer prices and threatening the recovery of Sri Lanka’s vehicle import sector. The Association urged authorities to reconsider the decision, highlighting its potential impact on vehicle affordability and the wider market. (Newswire)

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The Vehicle Importers Association of Sri Lanka (VIASL) says ships carrying vehicles from Thailand and Japan are due to arrive at the Hambantota Port this week.

Addressing the media, VIASL President Prasad Manage said that a ship from Thailand, carrying double cabs, will arrive tomorrow (26 Feb). 

He further said that another ship carrying a variety of vehicles from Japan will arrive on Thursday (27 Feb). 

Responding to questions on vehicle prices, he said double cabs are expected to cost between Rs. 24 million to Rs. 25.5 million.

He further said that vehicles from Japan, such as a Wagon R, can be obtained for Rs. 6 million or Rs. 6.5 million.

Pointing out that there was a significant reduction in prices compared to second-hand vehicles in 2018 and 2019, he said that the public will be able to purchase brand-new vehicles for a lower price.

The VIASL President expressed hope that customers will be able to see new vehicles at car dealers starting next week. (Newswire)

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