LNP – Hybrid vehicle import tax based on engine capacity will reduce costs, satisfy all

If hybrid vehicle imports are taxed based on their engine capacity, it will satisfy both consumers and the government, while reducing the prices of existing vehicles in the country, President of the Sri Lanka Business Council of Japan Jagath Ramanayake said.

Addressing the media, he said that there is an increasing global trend in the use of hybrid vehicles. The foreign exchange required to import hybrid vehicles is significantly lower compared to petrol or diesel-driven vehicles.

Ramanayake proposed that the government should import used or brand-new vehicles while imposing taxes based on engine capacity, ensuring a consistent revenue stream for the government.

“Taxing hybrid vehicle imports based on engine capacity will benefit both consumers and the government. This approach will also lower the prices of existing vehicles in the country. If implemented, it would lead to higher-quality used or brand-new vehicles entering the market, increase workforce participation and reduce fuel costs,” he said.

He also commended the decision to allow the import of motor vehicles for personal use starting February 1, 2025, following a five-year suspension.

“As vehicle importers from Japan, we have discussed this matter with Sri Lankan vehicle importers and conveyed to the government that now is the right time to resume vehicle imports.

“After the COVID-19 pandemic, countries in Africa and Asia resumed vehicle imports within two or three years. Some nations reduced taxes to encourage imports, while others even imposed zero percent import taxes to meet the demand for vehicles essential for economic growth,” he said.

Ramanayake urged the Sri Lankan government to extend the permissible manufacturing year of imported vehicles from three years to seven years, citing the high quality of these vehicles. He emphasized that importing such vehicles would reduce costs by more than 50 percent while minimising environmental damage due to their use in controlled and eco-friendly environments.

He added that vehicles exported to countries like Australia, New Zealand and England are often nearly seven years old from the date of manufacture. Despite their age, the quality of these vehicles remains high.