ECONOMYNEXT – Sri Lanka’s authorities must consult vehicle importers when making decisions on relaxing an ongoing import ban, President of the Vehicle Importers’ Association Indika Sampath Merinchige said.
Welcoming a recent announcement by the government that it will scrap an import ban on several types of commercial vehicles, Merinchige told reporters on Monday August 14 that the authorities must convene industry representatives to formulate new laws or regulations with regard to vehicle importation.
Commenting on a similar relaxation of an import ban on refrigerated trucks imposed in 2020, Merinchige said a truck that cost half a million rupees now sells for about 1.5 million rupees.
“So regulations are needed,” he said.
Merinchige also called for a mechanism to address price increases in Japan when importing vehicles to Sri Lanka.
“You can add a surcharge for unnecessary purchases,” he said.
This is how it needs to be done, he added, noting that Sri Lanka does not have sufficient foreign exchange to completely relax the ban.
Sri Lanka banned the import of most vehicles and other goods during a currency crisis triggered by the worst case of macro-economic policy deployment (output gap targeting) since the setting up of a money printing central bank in 1950.
Buses, trucks, bowsers, milk tankers and refrigerated trucks are allowed to be imported from August 14.
The import ban on special purpose vehicles including fire engines, crane trucks, concrete mixer and concrete pump trucks was also lifted.
Used vehicles are also allowed, depending on their age.
Banned vehicles imported earlier and held up in ports would be released on the payment of an additional import duty of 30 percent.
Merinchige claimed the government is relaxing the vehicle imports in accordance with the wishes of the International Monetary Fund (IMF) which bailed Sri Lanka out of its worst financial crisis in decades.
“The government is doing this for the IMF. As traders, we also like this. But we don’t wish to lose it,” said Merinchige.
“Our letters of credit (LCs) are not accepted anywhere in the world now. We’ll have to change payment methods too,” he said.
Merinchige called for amendments to existing laws, adding that import relaxation must be done through consensus.
“Since the restrictions were imposed, there are about 600 vehicles in the port. We have been asking the government for two years to do this. The government still hasn’t been able to issue a circular and release these vehicles,” he complained. (Colombo/Aug15/2023)