The Government remains firm in its vehicle import tax revenue targets, dismissing recent speculation about a decline in demand for imported vehicles. Officials have reiterated their confidence in raising Rs. 350–400 billion through taxes on vehicle imports, despite market chatter suggesting otherwise.
Speaking to The Sunday Morning Business, Secretary to the Ministry of Trade, Commerce, Food Security, and Cooperative Development, K.A. Vimalenthirarajah, rejected claims of “suppressed demand” following the partial relaxation of the vehicle import ban. He pointed to recent banking activity, noting that the volume of Letters of Credit (LCs) opened over the past three months indicates ongoing market interest.
“Considering the number of LCs opened over the past three-month period, I think there is demand. While market behaviour can be unpredictable, we have seen substantial progress in tax revenue collection already,” Vimalenthirarajah said.
The statement comes amid growing concerns that higher taxes on imported vehicles may have dampened consumer demand, potentially undermining the Government’s revenue goals. These concerns have also fueled rumours of an impending tax cut — speculation that officials have firmly dismissed.
Director General of the Department of Trade and Investment Policies, M.K. Pradeep Kumara, echoed this stance, stating: “We are not considering or thinking of revising the revenue target. That was our original target; there has been no revision of it. We continue to stand by it.”
While public debate continues over the actual impact of elevated vehicle taxes on market demand, the Government appears resolute in its fiscal objectives, with no intention of altering its course.