• Vehicle prices to increase by 25% across the board
• Increase of 10% due to exchange rate, 15% due to surcharge, Rs. 250,000 due to SSCL
• Vehicles purchased after surcharge introduction to arrive by next month

Following the initial panic buying of imported vehicles in the aftermath of the introduction of the surcharge, vehicle importers have observed a sharp decrease in Letters of Credit (LCs) being opened to fund imports, given the approximate 25% price increase across the board.  

Speaking to The Sunday Morning Business, Vehicle Importers’ Association of Sri Lanka (VIASL) Secretary and Media Spokesperson Arosha Rodrigo stated that recent developments in the market, including the imposition of a 50% surcharge on the Customs Import Duty (CID) on vehicles, would see the price of vehicles increase by an average of 25% across the board.

“There will be an approximately 10% increase due to the exchange rate. As a result of the surcharge, we will see an increase of around 15%, along with an increase of Rs. 250,000 because of the Social Security Contribution Levy (SSCL). Consequently, the price of a vehicle will increase by an average of around 25%,” he explained.

Rodrigo further revealed that despite the introduction of the 50% surcharge on the CID on vehicles from 16 May, LCs continued to be opened for vehicle imports at these prices during the following two weeks. 

He attributed this to concerns among importers that a complete ban on vehicle imports could be reimposed.

However, Rodrigo noted that since then, this initial panic buying appeared to have eased, with the opening of LCs for vehicle imports beginning to decline.

“There were some who panicked and decided to purchase vehicles regardless of the cost from 15 May until recently, fearing a total ban on vehicle imports,” he stated.

He explained that vehicles purchased after the introduction of the surcharge would arrive in the country by next month. As such, the full impact of the surcharge on import volumes is likely to become evident only in the following month. 

The Ministry of Finance, Planning, and Economic Development had, by an order made in terms of the powers vested under Section 10A of the Customs Ordinance (Chapter 235), as amended by Act No.83 of 1988, introduced a temporary 50% surcharge on applicable CID for public transport vehicles designed to carry 10 or more persons; motor cars; station wagons; racing cars; specialised vehicles such as ambulances, prison vans, and hearses; motorhomes; and golf cars, valid for three months and effective from 16 May 2026 onwards.