Questions have emerged over the effectiveness of the government’s temporary 50 percent surcharge on vehicle import duties after the latest figures from Sri Lanka Customs showed that vehicle imports have not significantly declined in 2026.
The surcharge was introduced as a measure aimed at discouraging non-essential imports and reducing pressure on the country’s foreign exchange reserves amid ongoing economic challenges.
Customs Media Spokesperson and Director General of Customs Chandana Punchihewa stated that the Ministry of Finance had not imposed a complete ban on vehicle imports, but had instead introduced an additional surcharge on existing customs duties.
According to Punchihewa, authorities initially expected the measure to result in a noticeable reduction in vehicle imports during 2026.
However, customs data suggests that those expectations have not materialized.
He noted that vehicle imports continue to account for more than 30 percent of the total revenue generated by Sri Lanka Customs, with revenue patterns remaining broadly similar to 2025 levels.
“During discussions between Sri Lanka Customs and the Ministry of Finance, it was anticipated that revenue from vehicle imports in 2026 would decline considerably compared to previous years. However, although the pace of imports was expected to slow, many vehicles remain visible in the market and a significant number have yet to be sold,” Punchihewa explained.
Customs officials further noted that although the number of imported vehicles may have declined to some extent, overall revenue has remained relatively stable largely due to exchange rate movements.
The appreciation of the US dollar has increased the rupee value of imports, resulting in higher customs valuations even when import volumes decrease.
As a result, vehicle-related revenue continues to account for around 30 to 35 percent of total customs income, reflecting a pattern similar to last year.
The latest figures have prompted economic analysts to question whether the surcharge policy has genuinely reduced import demand or whether currency depreciation has merely inflated import values without significantly affecting overall import behavior.
