50% Import Duty Surcharge Imposed on Selected Vehicle Imports in Sri Lanka

The Ministry of Finance, Planning and Economic Development has officially announced a temporary 50% surcharge on applicable Customs import duties for a range of selected imported goods, with a major focus on motor vehicles. According to an Extraordinary Gazette notification issued by the Ministry, the order has been implemented under the powers vested by Section 10A of the Customs Ordinance (Chapter 235), as amended by Act No. 83 of 1988. The Ministry confirmed that the 50% surcharge will apply to both General and Preferential Customs Duty bases. The new tax measure came into effect today (May 16) and will remain valid for a period of three months. The official order, approved by Minister of Finance, Planning and Economic Development Anura Kumara Dissanayake, specifically targets a wide range of motor vehicles. The affected categories include public transport vehicles designed to carry ten or more passengers, motor cars, station wagons, racing cars, ambulances, prison vans, hearses, motor homes, and specialized vehicles such as golf carts. The regulation also covers various technical classifications based on cylinder capacity, propulsion type, and vehicle age. This includes diesel, semi-diesel, spark-ignition, hybrid, and fully electric vehicles. However, the Ministry clarified that the newly imposed surcharge will not apply to Letters of Credit (L/Cs) opened on or before May 15, 2026, for the importation of motor vehicles listed in the schedule. Meanwhile, the Vehicle Importers’ Association stated that the latest tax revision could significantly increase vehicle prices in the local market. According to the association, estimated price increases may include: Daihatsu Mira – increase of around LKR 500,000 to 600,000 Suzuki Wagon R – increase of around LKR 700,000 to 800,000 Honda Vezel – increase of around LKR 1.8 million to 1.9 million Toyota Yaris Cross – increase of around LKR 1.4 million to 1.5 million Toyota Raize Hybrid – increase of around LKR 1.2 million to 1.3 million Toyota Land Cruiser Prado – increase of around LKR 3.5 million to 4 million Industry analysts believe the temporary surcharge could further impact vehicle affordability and overall demand in the country’s recovering automobile market.