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Government dodging import quota meeting with vehicle sector

11 May 2021

 

  • Importers ready to submit vehicle import quota

  • Govt. yet to call importers for a meeting

  By Karen Hapuarachchi    The Vehicle Importers’ Association of Sri Lanka (VIASL), whose members’ livelihoods have been drastically affected by the ban on vehicle imports since April 2020, is struggling to meet with Government officials to discuss the terms of a quota for resuming vehicle imports while mitigating foreign exchange outflow. Speaking to The Morning Business, VIASL President Sampath Merenchige stated that the proposal for the quota had been in preparation since March, and has now been finalised. “The proposal has been completed. The next step was to present this to the Government, which we have been finding it difficult to do.” Merenchige commented.  Accordingly, Merenchige explained that VIASL has been attempting to schedule a meeting with the relevant Government officials such as Head of the Presidential Task Force for Economic Revival and Poverty Alleviation Basil Rajapaksa, Prime Minister Mahinda Rajapaksa, and President Gotabaya Rajapaksa himself.  However, Merenchige revealed that these attempts had proven unfruitful. Against the backdrop of the recent surge of Covid-19 in the country, Merenchige added that VIASL would continue to present such solutions to ensure the survival of the vehicle import industry. Speaking to The Morning earlier this year, VIASL had stated that the proposal consists of the request for exporters to deposit money, the mechanism of registering its members, and sharing the quota for imports.  Another goal of VIASL involved the release of about 150 imported vehicles of doctors and engineers that are stuck in the ports. Acknowledging the need to retain foreign reserves in Sri Lanka, VIASL has also presented solutions for the importation of small vehicles rather than large vehicles, as less foreign exchange would be spent on smaller vehicles. It was also mentioned that the resolutions to the drastic challenges that the vehicle importers are facing would depend on what the political authorities decide to do next. The Association was expecting to discuss the management of what it called “the monopoly of local vehicle manufacturers” in the industry, and implementing a mechanism to put an end to it to assure that businesses can survive. The VIASL President, stressing that the Association is supportive of the local manufacturing industry, however claimed that the majority of locally-manufactured vehicles are inferior. Following the ban on vehicle imports last year due to currency depreciation and the plummeting of forex reserves, the VIASL was asked to draft a plan that would not put pressure on the currency and safeguard foreign exchange reserves in the event of the importation of vehicles. The Association, in a previous interview with The Morning in February 2021, noted that vehicle importers had been out of stocks for six months, and was eager to work with the Government to devise a solution to the issue. VIASL also stated that 200,000 employees were losing their jobs, while businesses that import vehicles were going through “difficult challenges that are almost impossible to overcome”.  It noted that both businesses and employees were going into debt to pay for expenses and overheads, while uncertainty over when the ban would be relaxed left them unsure of meeting these debt obligations. Thereby, the Association also suggested that the Central Bank work on finding a solution to these problems, highlighting that the vehicle importing industry is one of the largest sources of tax revenue in the country.  As per the Gazette Extraordinary Notification No. 2176/19, dated 22 May 2020 which was published to amend the regulations that was stipulated by Gazette Extraordinary Notification No. 2171/5, dated 16 April 2020, strict restrictions were placed on vehicle imports, while urging importers to negotiate with their suppliers to extend their credit periods. 


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