Economic Analyst Dhananath Fernando has stated that restrictions imposed on vehicle imports could lead to serious market complications. He further noted that, as the country’s demand for vehicles has already been met to a certain extent, tax revenue generated from vehicle imports this year is expected to decline compared to the previous year. 

He pointed out that the government’s decision on whether to extend the current vehicle import policy beyond 15 August will be a key factor in this regard.

Fernando further stated that, although additional surcharges cannot be imposed under the agreements reached with the International Monetary Fund (IMF), removing the existing surcharges could result in another market shock. 

He explained that the high demand for vehicles witnessed in the recent past has largely been fulfilled, and importers have already brought in vehicles to meet current requirements. As a result, vehicle registrations have gradually declined, leading to expectations that revenue from vehicle import taxes will not reach the levels recorded last year. 

Emphasising that it would be unfair to impose further taxes when vehicles are already subject to customs duties as high as 150% and 200%, Fernando stated that the government should focus on effectively managing public expenditure rather than continuously increasing the tax burden on the same segment of society.

He further noted that tax revenue could be increased to some extent by accelerating essential economic reforms, which would also send a strong signal to the market that the country’s economy is moving towards recovery and growth.