The Ceylon Motor Traders’ Association estimates that the way used vehicle imports are valued for duty cost the government about Rs. 40 billion in revenue in 2025 alone, and says a similar loss could recur this year without a change in policy, the Daily Mirror reported.
The mechanism
At issue is a blanket 15% depreciation applied to the cost, insurance and freight value of used vehicle imports when duty is calculated. The CMTA argues the concession is indiscriminate: a vehicle entering Sri Lanka as a “used” unit can be virtually identical to a brand-new one in model, specification and, in many cases, mileage — yet attracts materially less tax simply because it was registered overseas first.
The Association’s proposed alternative is not new. It has previously pressed for a structured depreciation scale based on a vehicle’s actual age, capped at a maximum of 10%, and says that principle still holds. Any concession that remains, it argues, should rest on objective criteria and apply within a consistently administered framework, with valuations reflecting genuine transaction values.
The wider complaint
The CMTA, founded in 1919 and affiliated to the Ceylon Chamber of Commerce, also objects to the recent 50% surcharge on vehicles, saying such a cost carries through the whole value chain — prices, affordability, business viability and after-sales servicing.
It says authorised importers carry costs that other segments do not: showrooms, service centres, technical equipment, training and staff, along with taxes, duties, EPF and ETF obligations. A regime that burdens the compliant while leaving valuation advantages elsewhere, it argues, undermines the ecosystem consumers rely on after purchase.
Read with the source in mind
This is a position statement from a trade body whose members are authorised distributors of new vehicles — among them David Pieris Motor Company, Kia Motors Lanka, DIMO, Ideal Motors, United Motors Lanka, Stafford Motors and Associated Motorways, whose executives appeared alongside CMTA Chairman Andrew Perera. Tightening the used-import depreciation allowance would narrow the price gap against their own products.
The Rs. 40 billion figure is the Association’s own estimate. Neither the Finance Ministry nor Sri Lanka Customs has published a corresponding number, and no response from either had been reported at the time of writing.
