New regulations for vehicle importers to protect foreign reserves

The Ministry of Finance has announced that vehicle importers must register at least 25% of their total imports within a six-month period or risk having their import permits suspended.

The new measure has been introduced to safeguard the country’s foreign exchange reserves, control excessive vehicle imports, and prevent unnecessary stockpiling of motor vehicles. However, the ministry clarified that these regulations do not apply to individuals importing vehicles for personal use, as they are permitted to import only one vehicle.

The regulations were discussed during a recent meeting of the Committee on Public Finance (COPF) on vehicle imports. Controller General of Imports and Exports, Upulmali Premathilaka, elaborated on the new framework.

“In 2020, vehicle imports were temporarily suspended. However, following a Cabinet decision and observations made by the Central Bank, a gazette notification has now been issued, lifting the suspension and allowing vehicle imports under HS Code 8703,” she stated.

Premathilaka further noted that imported vehicles must be registered within 90 days. Failure to comply will result in a fine of 3% of the CIF (Cost, Insurance, and Freight) value, with the penalty capped at 45% of the CIF value.

“If importers fail to register 25% of their imported vehicles within six months, their import permits will be suspended, and the permission granted for vehicle imports will be revoked,” she added.

The new regulations seek to maintain a balance between allowing essential vehicle imports and ensuring economic stability by preventing over-importation.