Unusual price increase in vehicle market due to import restrictions

Vehicle prices in Sri Lanka increased to more than twice compared to other countries in the world, as a result of a government decision to continue the import ban of vehicles that have started since the outbreak of the pandemic until 2023, leading the country to face a major foreign exchange crisis, in addition to the imposition of high taxes. Accordingly, the prices of the vehicles increased, the prices of used vehicles were more than doubled, many vehicle sales outlets became empty, several car businesses closed down, and many employees lost their jobs. Some Members of Parliament in Sri Lanka condemned the government decision, saying that Sri Lanka is the only country in which to ban vehicles import because it is not a necessity, and they emphasized that the import tax is very high as about 200% to 300% of the car price is calculated as tax. Therefore, citizens in Sri Lanka, a low-income country, will have to spend about 35-40 months’ total income for a car, while in developed countries, the cost is about 4-5 months’ person’s income.