Reports of alleged discrepancies in the timing of vehicle import Letters of Credit (LCs) have emerged in Sri Lanka following the introduction of a temporary 50% surcharge on customs import duties for imported vehicles, leading to political attention on the implementation of the measure.

Earlier this week, the Cabinet of Ministers approved the submission to Parliament of orders relating to the surcharge under regulations issued through the Import and Export Control Act. The new measure came into effect on May 16th for a three-month period. Under the revised structure, the 50% surcharge is added to the existing 30% customs import duty, resulting in an estimated 15% increase in vehicle prices. However, the surcharge does not apply to vehicles for which Letters of Credit were opened on or before May 15th, 2026.

During a parliamentary debate on May 21st, Samagi Jana Balawegaya MP Mujibur Rahman alleged that associates of the President had opened LCs to import thousands of vehicles ahead of the surcharge coming into force. Rahman claimed that 1,782 LCs for vehicle imports had been issued on May 15th, one day before the surcharge became effective. He further alleged that around 4,000 LCs had been opened during the preceding week.

According to the MP, two companies supportive of the National People's Power government had opened LCs for 4,000 vehicles on May 15th itself, with one company allegedly opening 3,500 LCs and another opening 500 LCs. He called on the government to investigate the matter. Rahman also alleged that the LCs had been issued to companies linked to Krishan Balendra, who he claimed was associated with the President's "Rebuilding Sri Lanka" programme, along with Dhammika Perera and Ishara Nanayakkara, whom he described as associates of President Anura Kumara Dissanayake.

Describing the matter as "organised crime", Rahman called for the release of the relevant list of importers. He further stated that President Dissanayake had previously criticised crony capitalism while serving as an opposition MP, but alleged that similar practices were continuing under the current administration.

The MP also questioned earlier statements made by leaders of the National People's Power during the election campaign. Referring to Tilvin Silva, Rahman stated that the party had claimed supporters abroad would send foreign currency to Sri Lanka if a dollar shortage emerged. He also referred to allegations surrounding a reported US$ 1 million phone call involving Sunil Handunnetti, questioning the current status of those funds.

Rahman further alleged that the value of the US dollar was increasing rapidly, claiming that the exchange rate had risen from around LKR 355 (US$ 1 = 345) to levels approaching LKR 385 within a week. He also alleged that the Central Bank of Sri Lanka was restricting dollar releases due to conditions linked to agreements with the International Monetary Fund.

According to the MP, the country's economic conditions were deteriorating, resulting in rising prices of essential commodities, including rice. He claimed that both previous and current administrations had contributed to the economic difficulties through misleading policies.

Responding to the allegations in Parliament, Deputy Minister of Finance and Planning Anil Jayantha rejected the claims, stating that reports suggesting 4,000 LCs had been opened on May 15th were "completely false".

According to the Deputy Minister, official records from the Finance Ministry showed that only 1,782 LCs for vehicle imports had been opened on May 15th, before the gazette notification was issued. He stated that 9,429 LCs had instead been opened on May 18th, after the gazette introducing the surcharge had already been published.

Jayantha stated that there had been no leak of insider information regarding the surcharge and accused opposition MPs of attempting to mislead the public. He maintained that official documents contradicted claims regarding 4,000 vehicle imports or LC openings before the policy announcement.

The issue gained further attention after former Provincial Council member Niroshan Padukka alleged that certain vehicle importers had rapidly opened nearly 4,000 LCs ahead of the tax revision. According to Padukka, the activity contributed to the depreciation of the Sri Lankan rupee.

The Sri Lanka Vehicle Importers' Association has also called on the government to conduct an immediate investigation into the matter and release relevant information relating to the import approvals and LC openings.