Sri Lanka losing revenue from low tax on used vehicle imports, CoPF calls for Customs clarification
May 22, 2025 06:32 am
The Committee on Public Finance (CoPF) has raised concerns over potential revenue losses arising from inconsistencies in tax collection on imported motor vehicles, particularly used and short-distance driven units.
During a recent meeting, CoPF Chair MP Dr. Harsha de Silva questioned officials from the Sri Lanka Customs Department on the taxes levied on both registered and unregistered vehicle imports. He specifically sought clarification on the collection of Value Added Tax (VAT) on used vehicles and whether the process was equitable and efficient.
Officials informed the Committee that there is a variation in taxes imposed on used vehicles that are not registered and that have been driven only short distances. The Chair pointed out that, as the government expects substantial tax revenue from vehicle imports, the country is losing significant revenue under the current situation.
Accordingly, the Chair instructed officials from the Sri Lanka Customs Department to submit a report to the Committee on the taxes collected from a sample of imported used vehicles.
Meanwhile, the CoPF has granted approval for Resolutions under Section 8 of the Appropriation Act No. 34 of 2023 to revise the limits of several Ministries and Departments for the year 2024.
The revision of the limits of advance accounts of several Ministries and Departments for the year 2024 has already been set, and under the provisions of the Appropriation Act, the Minister of Finance is empowered to revise these limits of advance accounts by way of a Resolution based on emerging needs of the relevant year. Officials, in providing clarification on the proposed revisions, further stated that these revised limits must be presented to Parliament for approval.
Accordingly, advancing monies to be used in bribery detection as bribes - Commission to Investigate Allegations of Bribery or Corruption, printing and publicly and sales of publications advance account – department of educational publications, stores advance account (explosive items) – Sri Lanka navy, prisons industrial and agricultural undertakings – departments of prisons, seized and forfeited goods advance account – Sri Lanka customs, miscellaneous advances – department of state accounts, railway stores advance account department of Sri Lanka railways, stores advance account – government factory, government factory work done advance account – government factory, advances to public officers received the approval of the Committee.
Commenting on the advancing monies to be used in bribery detection as bribes - Commission to Investigate Allegations of Bribery or Corruption, the Committee Chair stated that the Committee on Public Finance would extend full cooperation for any task undertaken to curb corruption.
State Minister Dr. Harshana Suriyapperuma, Members of Parliament Ravi Karunanayake, Dr. Kaushalya Ariyarathne, Arkam Ilyas, Nimal Palihena, Attorney-at-Law Chithral Fernando, Attorney at Law, Thilina Samarakoon, Champika Hettiarachchi, and Lakmali Hemachandra, Attorney at Law were present at the Committee meeting held.
