The Ministry of Finance has introduced a new tariff system for motor vehicle imports, as per a special gazette notification issued on January 31, 2025. This new taxation method will come into effect from February 1, 2025, imposing a 30% flat duty on the total cost, insurance, and freight (CIF) value of imported vehicles.
Key Reasons Behind the New Tax System
The Finance Ministry has outlined several key objectives for this tariff revision, including:
- Safeguarding the country’s foreign exchange reserves
- Controlling excessive vehicle imports and stockpiling
- Increasing government revenue
This new 30% unified tariff will replace the current 20% basic import duty and the 50% surcharge, streamlining the taxation structure for vehicle imports. The amendment has been made under Section 10(A) of the Customs Ordinance and was officially legislated through Gazette No. 2421/43, dated January 31, 2025.
Impact on the Economy and Vehicle Import Sector
The government expects that this new tariff system will:
- Strengthen overall economic stability
- Promote transparent and efficient vehicle import regulations
- Improve foreign exchange management
- Enhance state revenue collection
Introduced under Section 235 of the Customs Ordinance, these amendments aim to curb irregularities in the vehicle import sector while making the tax process simpler and clearer for importers.
With the implementation of this new taxation system, the vehicle import sector is expected to undergo significant changes, contributing positively to Sri Lanka’s economic stability and fiscal sustainability, according to the Ministry of Finance.
