Following false media reports on granting a quota to import vehicles by the Government, vehicle importers are hopeful of another round of discussion promised by the Government within next two weeks.
President of Vehicle Importers Association of Lanka (VIAL), Indika Sampath Merenchige told the Sunday Observer that the Association will continue to urge the government to take steps to protect the industry.
 Indika Merenchige
Pic: Courtesy- BBC.com
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“We understand that there has to be some measures to prevent the drain of foreign reserves from the country. However, the industry also has to survive,” he said.
Last week several media reports stated that the Government has agreed to permit vehicle imports, ending the ban which came into effect in April last year.
The Government implemented this ban along with several other imports to face economic challenges due to the global pandemic. In September 2020, Government spokesman Minister Keheliya Rambukwella made known the stance of the Government regarding the ban on imports of vehicles.
“There are enough and more vehicles in the country for a year. We need to have certain controls where foreign exchange is concerned,” he told the media.
In 2020, Sri Lanka secured nearly US$ 700 million in foreign reserves helped by a 45% decrease in the annual vehicle import cost, compared to 2019.
“Currently the prices of vehicles have gone sky high. Therefore, our request for an annual quota for vehicle imports is fair. We do not ask the government to go back to the status-quo. We understand the economic challenges of the Government. But there should be a mechanism to protect traders in the vehicle import market,” Meranchige said.
“No country has developed without the expansion of the private sector. A government cannot only upgrade the economy while being engaged in welfare activities,” he said. Currently there are about 600 registered vehicle importers in Sri Lanka and only about 200 of them are actively involved in the business. Asked about the possibility of a monopoly following a quota system, Meranchige said, “We are requesting a quota for every player in the market, not for a select few traders. We never intend to create a monopoly in the vehicle market. There has to be a reasonable and fair quota system where the total imports are divided among all the players. By doing that, a competition among traders would be created instead of a monopoly.
“Such competition will be benefit customers. If there are malparactices in the indystry, the Government can always intervene and regulate the market” he explained.
VIAL also prefers a tax revision for vehicle imports which will benefit end-customers and the Treasury. Meranchige commended the tax reforms introduced by then Secretary to the Ministry of Finance (currently the Secretary to the President) Dr. P.B. Jayasundera in the last budget presented by the Mahinda Rajapaksa Government in November 2014.
Dr. Jayasundera simplified the tax scheme for vehicle importation in the 2015 Budget. But the previous Government could not implement the benefits of those reforms and failed to maintain tax percentages correctly. Therefore, we request the present Government to revisit the tax structure for vehicle imports when imports are permitted,” the VIAL President said.