Why cars cost so much in Sri Lanka
The cars are not better here. They are taxed. Of every Rs. 100 you hand over for an imported car, around Rs. 70 goes to the government — and the rest was never really about the car either.
What is added to the price of an imported car
Rates in force since 1 February 2025. They move with each budget, so check them before you commit to anything.
- Customs import duty
- 20% plus a 50% surcharge on the shipped value
- ≈ 30%
- Excise duty
- Depends on engine size or motor power — the biggest single piece
- 200–300%
- VAT
- Charged on the shipped value plus the duties above
- 18%
- Luxury tax
- On value above Rs. 50 lakhs (petrol/diesel), 55 lakhs (hybrid), 60 lakhs (electric)
- 60–120%
- SSCL levy
- Added from April 2026; analysts expect prices to rise again
- 2.5%
Two real examples
A small car, under 1,100 cc
72% of the price is tax
A three-year-old 1,498 cc car
64% of the price is tax
And why old cars are expensive too
Sri Lanka closed the door on private car imports in May 2020 to protect its foreign currency, and only opened it again on 1 February 2025. For almost five years nothing new arrived, so the cars already on the road became the entire market.
Only cars up to two or three years old may be imported, so second-hand cars stay scarce. That is why a 2013 hatchback still asks what it does.
Sources: Ceylon Petroleum Corporation monthly price data (2020–2026); published tax schedules effective 1 February 2025; press reporting on the 2026 revenue measures. Gathered September 2026 — worth checking again before you quote them to anyone.