The Hon. M. Nizam Kariapper, PC

¶ 01 Hon. Madam Presiding Member, today Parliament has before it, for approval, a Resolution under the Customs Ordinance, a Regulation under the Excise (Special Provisions) Act, an Order under the Finance Act, and a Regulation under the Construction Industry Development Act. Among these, the Resolution under the Customs Ordinance and the Regulation under the Excise (Special Provisions) Act clearly relate to HS Code 115.

¶ 02 Let me explain. Inevitably, transport in our future must transition this way: from the traditional combustion engine, first to electric-assist or hybridized combustion engines, then to plug-in hybrids, and finally to 100 per cent electric vehicles. That is the accepted international evolution pathway. Inside and outside Parliament, many focus primarily on immediate financial gains and losses. But beyond that, a major public good lies in reducing environmental pollution and lowering our carbon footprint by moving away from fossil oil. Public awareness on this is lacking.

¶ 03 I suggest that when defining HS codes and the tax treatments tied to those codes, we should, as far as possible, anchor concessions to the carbon footprint. Perhaps some of this is already considered, but I am not sure how far it goes. Without that linkage, we will struggle to reach our targets, because many assess only vehicle prices and ongoing energy costs—electricity or fuel. We must think beyond that.

¶ 04 As an example, the Government plans to expand expressway use, and there is interest in the Central Expressway. As someone from Kalmunai in the Eastern Province, I frequently use the Southern Expressway. Today we speak of EVs that can travel 450–500 km on a single charge, although those are very expensive. More affordable EVs typically offer 250–300 km. Why don’t more people buy them? Because once you enter the Southern Expressway with a single charge, you meet the first service area only after 40–50 km. You can charge there, but then it is about 150 km to the Mattala exit, and from there roughly another 200 km to charging locations towards Kalmunai—altogether around 425 km. If your practical range is about 300 km, you fear the charge will run out over a 300–350 km leg. The lack of parallel charging infrastructure is a serious constraint. At minimum, we need fast, standard charging points—10 to 15-minute fast chargers—at terminal points and key service areas on expressways. Without that, bringing in EVs will continue to face challenges.

¶ 05 There is also the question of three-wheelers (tuk-tuks). A conventional three-wheeler now costs over Rs. 2 million; electric versions are even more expensive. Even if monthly energy costs are lower, the operator cannot easily pass that benefit to customers when he must recover a large upfront investment. We therefore need a special programme to address this. Technical issues also arise if home charging of three-wheelers is done through ordinary household wiring not designed for sustained loads, which can create further problems. These matters must be addressed.

¶ 06 Another serious issue concerns the HS code categories themselves. We categorize based on vehicles arriving in the market—multiple categories now: hybrid, 100 per cent electric, and more. New technologies are emerging daily: series versus parallel hybridization, different powerflow architectures, and combined systems. We cannot keep chasing every incremental configuration with separate HS codes. Moreover, there are instances of fraud through HS code misclassification. We have seen questions raised, for example regarding BYD models and the absence of robust standard verification mechanisms. We must be sensitive to these risks.