The Hon. Ravi Karunanayake

¶ 01 Hon. Presiding Member, thank you for allowing a few points in this debate on the Resolution under the Customs Ordinance.

¶ 02 We speak today about reopening vehicle imports after a temporary suspension, ensuring revenue, and our path to fiscal consolidation. The government targets about USD 1.2 billion. With 1.2% growth, adding 300 million, the expectation is to earn about Rs. 432 billion.

¶ 03 Budgeted 2025 revenue is Rs. 4,950 billion. Roughly 8.5% is expected from vehicles. From 18 Dec 2024 to 05 May 2025, 8,552 LCs have been opened to import 52,411 vehicles, totaling about USD 418 million in LCs.

¶ 04 So far, Customs has cleared around 10,800 bikes and 13,128 cars, yielding Rs. 89 billion in revenue. If this is for four months, then over eight months, total revenue could be around Rs. 280 billion. Expectations are Rs. 420–430 billion; we must see how to grow. Better to keep the rupee stable and supportive than suppressive.

¶ 05 Most cars are sourced from Japan. However, four major Japanese banks—Mitsui, Mitsubishi, Mizuho, and Sumitomo—are reportedly excluding our LCs, a consequence of 2022 default and rejection of LCs by state banks. We must fix this quickly to restore confidence with trading partners.

¶ 06 Vehicles are stuck one to one-and-a-half months before clearance due to officials’ processes, causing demurrage, ultimately borne by consumers—Rs. 150,000–200,000 extra. Hambantota takes ~10 days to clear, Colombo 4–5 days. We need to streamline, simplify valuation, and modernize procedures.

¶ 07 On trade: IMF urges exports, but imposes 36% taxes and removes duty concessions—this stymies export growth. I asked this morning because U.S. Treasury Secretary Scott Bessent announced negotiating 17 trade agreements in two days. The President convened an all-party group to engage; they met only the Deputy USTR, while other countries engage at head-of-state and Treasury levels. We export USD 3.2 billion to the U.S., 45% apparel—about 835,000 workers connected. We must negotiate tariff relief. Also, utilize the Indo–Sri Lanka FTA to expand exports to India.

¶ 08 On services: Port City can attract investment. If we miss this, Maldives is moving with a Maldives International Financial Centre—100% foreign ownership, full duty-free status, light taxation, robust dispute resolution—all investor comforts. Sri Lanka has a golden opportunity; we must offer competitive incentives and actively market Port City as an entrepôt trading and financial centre, including to Indian investors.

¶ 09 In conclusion, maximize revenue through policy execution, present proposals globally, and restore Sri Lanka’s investment allure. Thank you.