Sri Lanka extends 50% surcharge on vehicle import duties until end of 2026

Sri Lanka's President Anura Kumara Dissanayake, acting as Minister of Finance, has issued an extraordinary gazette extending a 50% surcharge on import duties for vehicles until December 31, 2026. This decision aims to manage the country's foreign exchange reserves.

The surcharge was first implemented on May 15, following a significant increase in vehicle imports. At its peak, the country was importing approximately $7 million worth of vehicles daily, placing considerable pressure on the Sri Lankan rupee. The government responded by imposing the additional 50% duty for an initial three-month period.

Following the imposition of the surcharge, the daily value of imported vehicles reportedly dropped to $3.9 million. Vehicle importers have previously indicated that this surcharge would lead to a slight increase in vehicle prices. They noted that vehicles currently in showrooms were imported before the surcharge took effect, and subsequent arrivals would likely be more expensive.

The extension of this measure suggests the government's continued concern over the balance of payments and its efforts to stabilize the national currency.