CBSL Justifies Vehicle Tax Hike to Control Rising Imports

COLOMBO (News 1st); Central Bank Governor Dr. Nandalal Weerasinghe stated that the government’s recent decision to increase taxes on motor vehicles is a pre-emptive measure aimed at temporarily controlling imports and reducing potential future risks.

Speaking on the matter, Dr. Weerasinghe explained that such action was necessary in response to growing uncertainty and the need to better manage external pressures on the economy.

He noted that within the first three months of this year alone, vehicle imports had already reached approximately US$600 million. If this trend continues, the total value of imports could rise to around US$2.4 billion by the end of the year, surpassing last year’s figures.

The Governor pointed out that earlier projections had anticipated lower vehicle imports for the year, estimating the figure to remain below US$2 billion. However, current trends indicate that imports may meet or even exceed those expectations.

Despite the increase in imports, Dr. Weerasinghe stated that there is no indication at present that this would have a negative impact on government revenue.

He emphasized that such policy measures are part of broader efforts to prepare for potential risks and ensure economic stability.