Sri Lanka’s government has announced that it will lift the ban on importing motor vehicles, starting on October 1, 2024. This decision comes after more than four years of strict import restrictions that were originally put in place to protect the country’s foreign exchange reserves during the economic crisis.
The ban, which was introduced in March 2020, was aimed at stopping the outflow of foreign exchange as the country’s economy worsened. Now, as part of its economic recovery plan, tied to the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) Programme, Sri Lanka will begin importing vehicles again in stages.
Three stages for lifting the ban
The government has outlined three stages for lifting the ban, covering a total of 304 HS Codes. Each stage will allow different types of vehicles to be imported:
Stage 1 (October 1, 2024):** Public passenger transport vehicles, special-purpose vehicles, and non-motorized goods will be allowed.
Stage 2 (December 1, 2024):** Commercial or goods transport vehicles will be permitted.
Stage 3 (February 1, 2025):** Personal vehicles such as cars, vans, SUVs, and pickups will be allowed.
The government hopes this phased approach will boost the economy, especially the auto industry, which has struggled with an aging fleet of vehicles that are costly to maintain and inefficient in fuel use. Importing new vehicles is expected to bring more revenue to the government, though the reintroduction of imports will put some pressure on the country’s foreign exchange reserves. To help manage this, additional duties will be applied to vehicle imports.
