Sri Lanka is banking on vehicle import taxes to boost revenue and revive the island nation’s battered economy, according to its leftist president’s maiden budget.
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Vehicle imports were banned in 2020 to save foreign exchange but the move deprived authorities of a lucrative revenue stream, as cars were taxed at about 300 per cent.
President Anura Kumara Dissanayake said the ban’s end would bolster state revenue to meet the tax target of 15 per cent of gross domestic product, which the country must achieve under the terms of an International Monetary Fund bailout agreement.
“For the year 2025, the bulk of revenue gains is expected to be delivered by the liberalisation of motor vehicle imports,” the president told parliament on Monday.
“This process is being carefully monitored to ensure that the import of vehicles does not result in undue negative impacts on external sector stability.”
The budget also doubled the entrance fee of the island’s two casinos to US$100 and raised the turnover tax on gaming establishments to 18 per cent, up from 15 per cent.