Govt. cautious on lifting ban on vehicle imports

Finance Ministry says in-depth study required before lifting any restrictions 
slapped on 
vehicle imports

Responding to the speculation that the ban on vehicle imports may be lifted, the government asserted that an in-depth study is required before lifting any restrictions slapped on vehicle imports, given the fact that the rupee has appreciated by only 20 percent against the US dollar so far during the year, after depreciating by a record 78 percent last year.
The Parliamentary Committee on Economic and Physical Plans, chaired by MP Mahindananda Aluthgamage, this week recommended the government to take an immediate decision on the ban on vehicle imports, to boost the revenue collected by Sri Lanka Customs (SLC).
“We are thankful for the proposal made by the Parliamentary Committee on Economic and Physical Plans to increase the SLC revenue. However, we need to conduct an in-depth study whether we are in a position to allow vehicle imports into the country, on credit basis because we are a country that is still grappling to come out of a massive debt burden,” Finance State Minister Ranjith 
Siyambalapitiya remarked.
“Therefore, we need to make a decision after carefully scrutinising all aspects, instead of merely looking at one aspect and overall impact on the national economy,” he added.
The SLC officials told the Parliamentary Committee on Economic and Physical Plans that the agency was only able to collect Rs.330 billion in revenue up to May, this year and projected the full-year revenue would fall below the target of Rs.1226 billion, reaching only Rs.783 billion by the year-end.
Making the case for lifting the ban on vehicle imports, they noted that SLC could collect Rs.150 billion in the next six months of the year, if the ban on vehicle imports 
is lifted.

However, Siyambalapitiya pointed out that SLC has met 99 percent of the revenue target during the first five months of the year, with a shortfall of only Rs.3 billion and he expressed confidence on SLC meeting the full-year revenue target.
“We are expecting a lower revenue collection from SLC during the first half of the year. Our target was Rs.333 billion revenue during the five-month period and SLC collected Rs.330 billion in revenue for the period. Hence, we have met 99 percent of the revenue target in the period,” he added.
In addition, he reminded that the fuel distribution is still taking place on a QR code-based system.
At the height of the foreign exchange crisis, the government imposed import restrictions on over 3,000 items. Siyambalapitiya noted that around 900 items still remain in the banned list, including 300 items related to vehicles.
The Finance Ministry is expected to submit a report to the International Monetary Fund within this month, presenting a timeline on lifting the remaining import restrictions.
Prior to the crisis, Siyambalapitiya acknowledged that SLC on average was able to collect Rs.1,226 billion in revenue per annum. The revenue from vehicle imports made up around 20 percent of SLC revenue.
Lifting the import restriction on vehicle imports would be a key decision authorities would have to take as in 2019, Sri Lankans spent over US $ 800 million on personal vehicle imports and US $ 1.5 billion in 2018. 
As of end-May, Sri Lanka’s official foreign reserves are estimated at over US $ 3.5 billion, including a US $ 1.4 billion swap facility with People’s Bank of China, which has conditions on its usability.