• VIASL claims importation happening at zero tariff rate 

Despite the Government's continued delay in lifting the vehicle import ban due to a lack of foreign reserves and the need to prioritise essential imports, a leading automobile assembly company has received cabinet approval to import electric vehicles or Plug-In Hybrid Electric Vehicles (PHEV) in semi-knockdown (SKD) form for local assembly at a zero percent Customs tariff on the CIF value, Vehicle importers charged yesterday (24).

Vehicle Importers' Association of Sri Lanka (VIASL) President Prasad Manage addressing a press conference in Colombo alleged that: “Senok (Senok Automobile Assembly Pvt. Ltd.) has already shipped 100 to 150 SKD kits. Moreover, a vehicle without tires too can be counted as a SKD kit. Therefore they are importing an entire vehicle with an all-inclusive 0% flat tariff, instead of the existing 30% tariff, for the importation of brand new SKD kits for the assembly of Electric Vehicles, Electric Two Wheelers and Plug-in-Hybrid Vehicles. Moreover, the imported vehicles are Chinese vehicle brands.”

The VIASL President claimed that the alleged importer has placed more shipments and one is already on its way which must be stopped since it’s a huge sum of foreign outflow which is around $ 500 million and the country doesn’t get a rupee in return. Moreover, there is no standard, quality or safety check on the vehicles that they are currently shipping to the country.

Generally, the Government charges a 200-250% duty tax for vehicle imports. As per the current tax structure the tariff payable including luxury tax on a small-size electric car is approximately Rs. 5,000,000 and the tariff including luxury tax on an average-size electric car is approximately Rs. 12,500,000.

The applicable taxes on a PHEV are far greater and will range from Rs. 25,000,000 to Rs. 75,000,000.

He implied that if the Government controls this type of dollar outflow they can easily uplift the vehicle import ban. 

According to VIASL, however, there is no value addition required on these vehicles in the first two years, which is designed to benefit a single company, Senok which claims to have fulfilled these requirements via investments made back in 2021.

Manage claimed that the company in question had fraudulently claimed to have met the conditions for this with investments made in 2021, including the Rs. 6.5 billion bank loan received at an outmoded currency conversion rate of Rs. 161/USD. Most notably, the foreign exchange reserves will not profit at all from this investment made in 2021.

The motor vehicle industry employs over 100,000 direct and indirect employees while around 400,000 are dependents of these employees. Allowing a single company to benefit from a 0% customs tariff will drive out the majority of the motor vehicle dealers from the market resulting in significant redundancy, the VIASL President said.