The temporary tax restrictions on vehicle imports will be removed once the conflict in the Middle East ends, Minister of Foreign Affairs, Foreign Employment and Tourism Vijitha Herath has said.
Herath was speaking as chief guest at Motor Rally 2026, a vehicle exhibition staged in Colombo on Sunday by the Vehicle Importers’ Association of Sri Lanka, NewsFirst reported. The event was organised to promote responsible motoring and disciplined driving.
The government’s aim, he said, is a country where every citizen has the opportunity to own and use a vehicle.
Tied to foreign exchange
Herath said the tax limitations were introduced because of the unexpected Middle East conflict, which raised concerns over economic stability and foreign exchange management — but that the measures are only temporary.
He noted how far the position has moved in a short time: two years ago Sri Lanka could not import vehicles at all, with imports fully suspended during the economic crisis. The economy has since achieved considerable stability and continues to strengthen, he said.
Herath did not give a timeline, and no condition beyond the end of the Middle East conflict was attached to the removal.
Where the restrictions stand
The current measures are tighter than Herath’s framing alone suggests. The surcharge on vehicle imports was extended through December, and the trade has been contending with disputes over pricing and customs valuation alongside the tax load.
Central Bank Governor Dr. Nandalal Weerasinghe, speaking to Bloomberg the same week, described the vehicle import restrictions and loan-to-value limits as macroprudential measures that are helping reduce import-related pressure on the economy — a framing that treats them as demand management rather than purely a response to the conflict.
Vehicle imports were suspended in 2020 to conserve foreign exchange and only reopened in stages from early 2025.
