By Rathindra Kuruwita

The government has not decided on a timeline to allow the free import of vehicles to the country, State Minister of Finance, Ranjith Siyambalapitiya says. He said that importing vehicles would be a drain on the country’s foreign currency reserves.

“We have allowed the import of 250 buses and 750 vans for tourism. We are looking into whether and how we can relax the import of vehicles. That’s it.”

Siyambalapitiya said there is one vehicle for five Sri Lankans. The government has appointed an expert committee to examine whether the country is ready to allow the import of private vehicles.

“We will decide what to do, based on what the Committee says. Some groups, like vehicle importers, are adversely affected by the restrictions on vehicle imports. However, we must look at national priorities.”

The State Minister said there will be a massive demand for vehicles, if the government relaxes the restrictions on vehicle imports. This would lead to a large outflow of foreign reserves.

“We have not allowed vehicle imports since 2020. The demand probably is huge now”.

Siyambalapitiya said there are sporadic rumours that the government will allow vehicle imports soon. “I don’t know how to make these videos and how they come with this idea,” he added.

He also said that they are closely monitoring the vehicles imported under a scheme to allow migrant workers to import vehicles.

Siyambalapitiya said that restructuring domestic debt was controversial and that the biggest burden of the restructuring was borne by the EPF.

“There are 2.7 million beneficiaries and last year, we promised to pay them an interest rate of 9 percent until 2026. However, at the end of 2023, we realized we can give a higher interest rate because of the good investments we had made with the fund. We decided to give an interest of 13 percent for 2023. What we will pay for 2024 will be decided in 2025,” he said.

He added that this is the first time that EPF beneficiaries received an interest rate of 13 percent after 2009.

Siyambalapitiya said in the past four months, the Central Bank has bought 1.2 billion dollars from the local market. If the Bank did not make this intervention, the exchange rate of the dollar will be about 250 rupees.

“This would have badly affected the exporters.”

Sri Lanka has exceeded its state revenue target for the first quarter of 2024 by 6 percent, Siyambalapitiya said, adding that the government expects a revenue collection of 4,106 billion rupees in 2024.

The State Minister said the government wants its revenue to be at least 14 percent of the GDP and that he believes the revenue target for the year can be achieved.

The Sri Lankan government collects revenue through three institutions, i.e., Sri Lankan Customs, the Excise Department, and the Inland Revenue Department, and has collected 834 billion rupees (about 2.8 billion dollars) in the first quarter, compared with an expected revenue target of 787 billion rupees (about 2.6 billion dollars) in the period, he said.

Siyambalapitiya mentioned that cheques will no longer be accepted to pay income tax. Over the years a large number of people have paid their income tax by cheque and a lot of these cheques have bounced.

The State Minister said that any government that comes into power will have to follow the current economic policies. There will be a collapse akin to 2022, if there is a diversion from the current path.