The Sri Lankan government has imposed a 50 per cent surcharge on vehicle imports, excluding motorbikes and three-wheelers, considering the continuing slide of the country’s currency.
President Anura Kumara Dissanayake, who is also the finance minister, said in a notification on Saturday that “by this order levy on imported goods specified in the schedule here to a surcharge at the rate of 50 per cent on applicable customs duty effect from May 16 for a period of three months”.
The rupee has seen over 3 per cent depreciation against the dollar by the middle of this month due to prevailing external pressures - primarily the Iran war, which has led to a massive surge in fuel import bill. The rupee, which was 309 to 310 against the dollar at the beginning of the year, currently stands at over 322.
Calling it a “temporary” measure, deputy finance minister Anil Jayantha Fernando told reporters that the move is effectively aimed at making importers delay purchases for three months - a move that could potentially save foreign currency reserves. He said the applicable customs duty for cars currently stands at 30 per cent.
The island’s foreign reserves, which stood at USD 7 billion by the end of March, declined to USD 6.76 billion by the end of April, mainly due to high energy costs caused by the West Asia conflict, according to central bank data.
Most Asian currencies have come under pressure in recent sessions, weakening against the US dollar amid rising oil prices, geopolitical tensions and renewed demand for safe-haven assets.
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