The Hon. J.C. Alawathuwala

¶ 01 Hon. Deputy Chairperson, while discussing vehicle taxation and several Finance Ministry orders, I must address a narrative: that Customs revenue is at historic highs. We know imports, especially vehicles, were halted for five years due to bankruptcy and external shocks. Post-election, there was talk of a Vitz car for Rs. 1.2 million. Social media raised public hopes. Today, that same class of car costs about Rs. 7.5 million—triple of prior prices—and even motorbikes and three-wheelers have skyrocketed; a three-wheeler exceeds Rs. 2 million. Remittances from our overseas workers and tourism sustain forex inflows—over USD 6 billion in remittances this year—yet how many Sri Lankans today can afford a vehicle? For the vast majority, it’s a dream. International research shows Sri Lanka is the third-highest vehicle-taxed country; I table that report.

¶ 02 Revenue gains are mainly from vehicle-related and consumption taxes. You even imposed Rs. 65 per kg on rice imports at a time that protected big rice businesses, not farmers, because the harvest was already over. You’ve taxed salt, coconut, coconut milk and other essentials; raised electricity tariffs by 15%; will levy 18% VAT on digital services from October; doubled stamp duty on rental agreements. People face severe hardship.

¶ 03 UN Human Rights Office reporting on Sri Lanka’s socio-economic situation notes 24.5% of people are at minimum food consumption levels; 16% of households lack a nutritious meal, with female-headed households especially impacted. Poverty and malnutrition are rising. While you tax via indirect levies, the low-income bear the burden. Farmers too are struggling despite promised guaranteed prices. Without corrective action, the most vulnerable will suffer further.

¶ 04 On vehicles: the State Minister said some imported vehicles will be re-exported. These were imported spending dollars. If there are regulatory gaps for EVs or others, fix the regulations through consultation, not re-export—this harms businesses and national credibility. Four taxes—excise (production), luxury tax, VAT, and Customs duty—ultimately fall on the consumer. If you handle this correctly, both consumers and businesses can meet their needs.

¶ 05 You also increased indirect taxes while, as we saw, around 300 containers were released without proper checks—no clarity on contents or lost duties. We also want law enforcement applied equally to ministers facing allegations—court orders must be enforced by CID and CIABOC. Thank you.