Vehicle importers brace for 2.5% tax hike and rising Japanese auction prices

Saturday, 14 February 2026 00:12 - - {{hitsCtrl.values.hits}}

The Vehicle Importers’ Association of Sri Lanka (VIASL) yesterday said a 2.5% tax on imported vehicles will come into effect from 1 April 2026, in line with proposals approved in the 2026 Budget.

Addressing a press conference in Colombo, VIASL Spokesperson Arosha Rodrigo clarified that the levy would not apply to vehicles currently in the process of being cleared. He added that the tax would be collected directly by Sri Lanka Customs.

Rodrigo said the additional charge would have a noticeable impact on retail prices given the high value of vehicles.

“Due to the high value of a vehicle, a 2.5% tax is a significant addition. Simply put, the price of a vehicle worth Rs. 10 million will increase by around Rs. 250,000. Therefore, a notable increase in vehicle prices can be expected with the addition of this tax,” he said.

Despite the impending price increase, he said consumer demand for vehicles remains strong. He added that second-hand Japanese vehicles have recorded price increases of 11% to 15% at recent auctions, amid the emergence of new markets for Japan’s used vehicle exports.