Sri Lanka’s vehicle imports continued to decline in February 2026, marking the second straight monthly drop as the post-ban surge normalises.
Imports of personal and commercial vehicles totalled US$ 194 million in February, down from US$ 224 million in January and US$ 301 million in December 2025. Cumulative imports for the first two months of 2026 reached US$ 418 million.
This follows a record US$ 2.047 billion in vehicle imports for the full year 2025, after the government lifted the five-year import ban in February 2025.
Revenue Impact
Vehicle imports were a major revenue booster in 2025, generating an estimated Rs. 870–904 billion in taxes far exceeding initial targets and contributing significantly to customs collections.
For 2026, Sri Lanka Customs has set a lower overall revenue target of Rs. 2,207 billion, with vehicle-related taxes expected to fall sharply to around Rs. 266 billion due to moderated import volumes. Analysts project total vehicle imports for the year at US$ 1.2–1.5 billion.
In January 2026 alone, nearly 55,000 vehicles were registered, generating Rs. 3.5 billion in registration revenue, though the trend is now easing.
Outlook and New Pressures
The slowdown reflects satisfied pent-up demand, high dealer inventories, and tighter financing. From April 1, 2026, a 2.5% Social Security Contribution Levy (SSCL) will apply at the port on vehicle clearances, expected to raise retail prices (e.g., adding ~Rs. 250,000 to a Rs. 10 million vehicle). Importers have urged clearing shipments before the deadline to avoid the levy.
The decline is seen as a healthy return to sustainable levels, easing pressure on foreign reserves while the market transitions from the 2025 boom to a more stable phase.
President Anura Expects USD 1.5–1.8 Billion in LCs for Vehicle Imports This Year
