Colombo, December 20 (Daily Mirror) – Taxing hybrid vehicle imports based on engine capacity could revolutionize Sri Lanka’s automobile market, satisfying both consumers and the government while lowering vehicle costs, according to Jagath Ramanayake, President of the Sri Lanka Business Council of Japan.
Speaking at a media briefing, Ramanayake highlighted the growing global shift toward hybrid vehicles, emphasizing their cost-effectiveness and environmental benefits. “Hybrid vehicles require significantly less foreign exchange to import compared to petrol or diesel-driven models. If taxes are imposed based on engine capacity, it will create a win-win situation for both consumers and the government, while reducing the prices of vehicles already in the market,” he explained.
He proposed a policy that allows the importation of both brand-new and high-quality used vehicles, with a taxation structure centered on engine capacity. This approach, he argued, would ensure a steady revenue stream for the government, provide consumers with access to affordable vehicles, and contribute to an eco-friendly shift in the country’s transportation sector.
Ramanayake also welcomed the Sri Lankan government’s recent decision to lift a five-year suspension on vehicle imports for personal use, starting February 1, 2025. He pointed out that this move aligns with post-pandemic trends observed in other regions.
“After the COVID-19 pandemic, many countries in Africa and Asia resumed vehicle imports within two to three years. Some even reduced or eliminated import taxes to meet the demand for vehicles essential for economic recovery,” Ramanayake said.
He further recommended extending the permissible manufacturing age of imported vehicles from three years to seven years. “Many vehicles exported to Australia, New Zealand, and England are up to seven years old but maintain high quality and durability. Allowing the import of such vehicles could reduce costs by more than 50 percent and minimize environmental impact due to their eco-friendly design and controlled usage,” he said.
Highlighting the potential benefits of his proposals, Ramanayake added that lower import costs could introduce higher-quality vehicles into the Sri Lankan market, boost workforce mobility, and significantly reduce fuel costs.
“The time is right to embrace these changes. By adapting our policies to the global trends in vehicle imports, we can unlock significant economic and environmental benefits for Sri Lanka,” he concluded.
The call for a hybrid vehicle taxation policy and a broader approach to vehicle imports reflects an urgent need to balance affordability, government revenue, and environmental responsibility in Sri Lanka’s automotive industry.
