How vehicle prices increase with the extension of tax imposition

The government has taken steps to extend the 50% import tax surcharge, which was scheduled to end on August 15, until December 31. The Sri Lanka Vehicle Importers' Association points out that with the extension of this tax imposition, vehicle prices in the local market are likely to increase significantly in the future.

Mr. Prasad Manage, President of the Sri Lanka Vehicle Importers' Association, revealed information on how the prices of vehicles currently in showrooms will increase due to this government decision. Accordingly, the price of a Suzuki Wagon R is expected to increase by approximately Rs. 500,000, a Toyota Raize by Rs. 1 million, and a Honda Vezel by Rs. 1.5 to 2 million. In addition, prices for double cab vehicles will increase by Rs. 2 to 2.5 million, Toyota Prado vehicles by Rs. 3 million, and Land Cruiser vehicles by approximately Rs. 5 million.

The president explained that 90% of the vehicles currently in the market were imported into the country under Letters of Credit opened before May 15, and therefore these vehicles are exempt from the relevant surcharge. However, vehicles imported through Letters of Credit opened after May 15 have now started to be cleared, and the increased tax amount directly applies to these vehicles.

Mr. Manage points out that the continuous imposition of such surcharges creates significant uncertainty and fluctuations in the market, and emphasizes the importance of implementing a stable tax policy instead of frequent price changes. Furthermore, President Prasad Manage states that steps should be taken to control Letters of Credit or use other alternative methods to prevent excessive price increases, and to stabilize the market by limiting imports.