The Vehicle Importers Association of Sri Lanka has asked the government to raise the loan-to-value ratio on vehicle purchases if it cannot remove the temporary 50% surcharge on customs import duty applied to selected motor vehicles.
Association Vice President Arosha Rodrigo told reporters the current 40% ratio should be lifted to 50% or 60%, making it easier for buyers to finance a vehicle purchase. The loan-to-value ratio caps how much of a vehicle’s value a lender may advance, so a higher ratio reduces the deposit a buyer must find upfront.
Rodrigo said that if the government cannot lift the surcharge because of concerns over foreign exchange and dollar outflows, it should at least act on the financing side to ease the burden on consumers.
How the surcharge got here
The 50% surcharge was introduced on May 16 as a measure to control foreign exchange outflows from vehicle imports. The Finance Ministry initially imposed it for three months, then extended it to December 31, 2026. The extension took effect on August 15 under an order issued by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning and Economic Development.
The association’s request was made in the same week that Minister Vijitha Herath told a Colombo motor show the restrictions were temporary and would be removed once the Middle East conflict ends.
Central Bank Governor Dr. Nandalal Weerasinghe has described the import restrictions and loan-to-value limits as macroprudential measures that are helping reduce import pressure on the economy — a framing that treats the loan-to-value cap as deliberate demand management rather than a temporary inconvenience, and one that sits awkwardly with the association’s request.
Vehicle imports were suspended in 2020 to conserve foreign exchange and reopened in stages from early 2025.
