Colombo: Sri Lanka is set to relax regulations on vehicle imports, marking a step toward economic healing after a severe crisis that led to the ousting of former President Gotabaya Rajapaksa.
Starting February 1, the government will allow imports of buses, trucks, and utility vehicles, with further facilitating expected in phases. However, many Sri Lankans remain eager for leaders to lift the ban on private cars, SUVs, and three-wheelers, which serve as crucial transport options.
Despite the move, affordability remains a key concern. Vehicle prices have skyrocketed due to scarcity, a weak currency, and high import taxes, leaving many questioning who will be able to purchase new cars.
The vehicle import ban was introduced in 2020 as Sri Lanka grappled with a foreign currency crisis, leading to its first-ever sovereign default in 2022. The country faced crippling needs of essential goods, sparking massive protests that led to a change in leadership.
Following a $2.9 billion bailout from the International Monetary Fund (IMF), the economy has shown indications of recovery. Experts believe lifting the import ban could boost revenue and generate jobs.
Murtaza Jafeerjee, chair of Colombo-based economic think tank Advocata stated that, “Vehicle imports will not only increase government revenue but also facilitate related economic activities such as car financing, dealership sales, and servicing.”
However, Information Minister Nalinda Jayatissa emphasised a mindful approach, stating that, “We don’t want a tide of imports that will deplete our foreign reserves.”
With Sri Lanka relying heavily on imports from Japan, India, and now China, the restrictions have driven used car prices to skyrocket—some instances now cost two to three times their pre-ban price. Small business owners and professionals who depend on work vehicles say the situation is hurting their livelihoods.
For many Sri Lankans, alternatives are restricted due to poor public transport. Sasikumar, a software professional from Kandy stated that, “Either the government should lift the ban or improve public transport.”
Even if imports resume, high excise duties and a weak rupee will keep prices elevated. The government has set excise duties of 200 percent–300 percent based on engine size, along with an 18 percent VAT on imported vehicles.
Car dealers, who have been hit hard by the ban, say affordability remains a major barrier. Arosha Rodrigo of the Vehicle Importers Association of Sri Lanka stated that, “Before the ban, we were importing 100 vehicles a month. Since then, we haven’t imported a single one.”
For many middle-class families, buying a car has become increasingly out of reach. As the prices continue to rise, the dream of owning a car remains distant for many Sri Lankans.
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