Vehicle imports: No import decline or revenue drop: Customs

Customs exceeds overall revenue target as of early June by 31 per cent  

Customs Media Spokesperson Chandana Punchihewa said that it is too early to evaluate the full effect of the Government's recent 50 per cent surcharge on vehicle imports, but noted that the Customs had not recorded a drop in revenue from the sector and had exceeded its overall revenue target by 31 per cent as at 3 June.

Speaking to the media yesterday (8), he said that there had been expectations that vehicle imports would decline to some extent because a large number of imported vehicles are still available in the local market. However, he said that the Customs had not observed a significant reduction in imports or the revenue generated from them.

He noted that although there may have been some decrease in the number of vehicles imported, recent global economic developments, particularly the rise in the value of the United States Dollar ($) amid international conflicts, had offset any possible decline in revenue. "Customs calculates taxes by converting the value of imported goods into Rupees using the applicable exchange rate. When the $ appreciates, the Rupee value of the imported goods also increases, and the tax collected rises accordingly," he said.

Punchihewa further said that even if there had been a reduction in import volumes, the increase in the value of the $ had prevented a significant impact on Customs revenue. "Vehicle imports continue to account for more than 30 per cent of the total Customs revenue. We have been assigned a revenue target of Rs 2,206 b for this year (2026) by the Finance Ministry."

According to him, the target for January was Rs 160.2 b, but that the Customs has collected Rs 235.2 b. In February, the target was Rs 165.9 b and collections have reached Rs 215.6 b. The March target of Rs 180.4 b was surpassed with a revenue of Rs 231.9 b, whereas April's target of Rs 181.3 b resulted in collections of Rs 242.9 b. Although the target for last month (May) was Rs 187.8 b, Customs has collected Rs 217.9 b. The target for this month (June) is Rs 184.9 b and by 3 June, the Customs has already collected Rs 37.9 b. By the end of May, the cumulative revenue target stood at Rs 875.6 b. Customs had collected Rs 1,143.7 b, exceeding the target by 31 per cent.

Punchihewa added that vehicle imports continued to make a substantial contribution to those figures. Of the Rs 235.2 b collected in January, Rs 91 b had come from vehicle imports. In February, vehicle imports generated Rs 75 b out of the total of Rs 215.6 b collected. The contribution was Rs 77 b out of Rs 231.9 b in March and Rs 84 b out of Rs 242.9 b in April. By 28 May, vehicle imports had generated Rs 76 b out of the total revenue of Rs 212 b.

He said that vehicle imports had contributed between 30 per cent and 35 per cent of Customs revenue in 2025 and that the proportion remained largely unchanged this year. "We have not seen the decline in vehicle imports that had been forecast," he said.

He also sought to clarify public perceptions about the recently imposed 50 per cent surcharge on vehicle imports. "If people hear about a 50 per cent surcharge, they may think that the price of the vehicle itself has gone up by 50 per cent. That is not what has happened. It is a surcharge. For example, if the Customs duty is 30 per cent, an additional 15 per cent is added. There is also a certain increase in the Value Added Tax, the overall tax burden does not increase by 50 per cent." He added that the surcharge had been introduced to ease the pressure created by changing economic conditions and the rising value of the $, which had affected several sectors of the economy. However, he said that it had not reduced vehicle imports to the extent that had been anticipated.

When contacted by The Daily Morning for further clarification, Punchihewa stressed that his observations were based on revenue data available to the Customs. "What I said was based on income. The number of imported vehicles may have declined after the Government imposed the surcharge, the revenue generated from vehicle imports has not gone down," he said.

He added that it is still too early to properly assess the impact of the surcharge itself. "The expectation that vehicle imports would decline this year was not solely because of the surcharge. A large number of vehicles had been imported last year and the Ministry had forecast that imports would slow this year. That reduction has not materialised so far."