The Vehicle Importers' Association of Sri Lanka (VIASL) stated yesterday that a 2.5% tax on imported vehicles will come into effect from April 1st, 2026, in accordance with proposals approved in the 2026 Budget.

Addressing a press conference in Colombo, VIASL Spokesperson Arosha Rodrigo clarified that the levy will not apply to vehicles currently undergoing the clearance process.

He further stated that the tax will be collected directly by Sri Lanka Customs.

Rodrigo noted that the additional charge is expected to have a noticeable impact on retail prices, given the high value of vehicles.

"Due to the high value of a vehicle, a 2.5% tax is a significant addition. Simply put, the price of a vehicle worth LKR 10 million (US$ 32) will increase by around Rs. 250,000. Therefore, a notable increase in vehicle prices can be expected with the addition of this tax," he said.

Despite the forthcoming price increase, he stated that consumer demand for vehicles remains strong.

He further added that second-hand Japanese vehicles have recorded price increases of 11% to 15% at recent auctions, amid the emergence of new markets for Japan's used vehicle exports.