The Hon. Nishantha Jayaweera

¶ 01 Madam Presiding Member, we debate the Resolution under the Customs Ordinance to introduce new HS codes for vehicle imports, the related Order under the Finance Act, the Regulation under the Excise (Special Provisions) Act, and the Regulation under the Construction Industry Development Act.

¶ 02 Since February 1, 2025, vehicle imports reopened. Customs levies duties according to HS codes. Previously vehicles fell into four main categories: fuel (petrol/diesel), electric, hybrid, and “Other.” With technological progress, a new class—series hybrids—has emerged, which did not fit existing codes and fell under “Other,” attracting very high duties. These vehicles are highly fuel-efficient (more km per litre). To extend relief fairly to consumers and importers, we introduced new HS codes for such technology.

¶ 03 On prices: the Opposition cites old prices when the dollar was Rs. 187. Today the dollar is around Rs. 300; thus the rupee amount payable for CIF is higher. Used market prices have also naturally adjusted—and sudden drops would severely impair leasing institutions. Considering these realities, the current duty structure has been set.

¶ 04 Opposition claimed duties are 300–600 percent. As at 27 July 2025, the CIF (cost, insurance, freight) value of imported vehicles totals Rs. 185 billion and the collected duties total Rs. 282 billion—about 152 percent of CIF on average, not 600 percent. Ultra-luxury vehicles with low fuel economy attract higher duty—which is fair, given the foreign exchange cost. By contrast, buses, lorries and commercial vehicles vital for growth carry much lower duties.

¶ 05 On Customs revenue: excluding vehicles, Customs collected Rs. 872 billion in 2024, and Rs. 978 billion in 2025 year-to-date—an increase of Rs. 106 billion (+12%). Monthly targets have been exceeded. As of 12 August 2025, against a target of Rs. 1.18 trillion, Customs has achieved Rs. 1.31 trillion—111 percent of target.

¶ 06 On import certifications: initially, JAAI and JEVIC were allowed. Bureau Veritas, a globally recognized certifier, was also permitted under the law which authorizes the Minister of Finance to recognize additional certifiers—this was lawful. Cross-border LC issues: some consignments violated Gazette provisions; the matter is before court and will proceed per judicial directions.

¶ 07 On Customs efficiency: under this government, performance has improved and further reforms are underway, including software systems to pre-file import data online and expedite clearance. Additionally, VAT refunds for tourists have been enabled, boosting domestic spending. Thank you.