In a signal that the nation is returning to normal after a severe economic crisis that toppled a senator, Sri Lanka is set to rest a moratorium on some car imports.
From 1 February, imports of cars, trucks and energy cars will be allowed to continue, while restrictions on other vehicles are expected to be eventually lifted.
Many Sri Lankans are anxious that the government will also impose a ban on imports of three-wheeled trishaws, which are frequently used as vehicles.
Some people are enquiring about who will be able to purchase a new car because of the price of cars that are being forced up by a lack of new ones to purchase, a weak dollar, and high taxes.
Sri Lanka was insolvent for the first time in its history as a result of a serious international currency shortage in 2022.
The 22 million-strong island nation was in disarray as a result of severe gas, food, and medication scarcity.
Just months afterward, huge anti-government demonstrations led to the ouster of then-President Gotabaya Rajapaksa.
Colombo negotiated a$ 2.9bn ( £2.3bn ) bailout from the International Monetary Fund, while Rajapaksa’s successor introduced austerity measures including hiking taxes and ending energy subsidies.
Since then, the nation’s money have stabilized, and the market has begun to recover.
Sri Lankans who have been waiting for years to purchase a new vehicle or van are now in awe of the decision to raise the trade restrictions on cars.
Murtaza Jafeerjee, head of Advocata, an economical think tank based in Colombo, told the BBC he thought the walk was long overdue.
” The car imports will not only increase the president’s revenue but will also cause other economic activities like auto financing, seller income, car cleaning and other related activities, creating jobs”, he said.
However, the nation’s information minister, Nalinda Jayatissa, stated in a press release on Tuesday that the nation was “moving very slowly because we don’t need a surge of imports that will destroy our unusual reserves.”
The land, which doesn’t have any major companies producing cars and trucks, exports nearly all its cars, many of them from countries like Japan and India. Then there’s a even lot of interest in Chinese vehicles, especially electric cars.
Used car prices in Sri Lanka have increased dramatically, with some types now costing two or three times as much as they did before the restrictions.
For those like Gayan Indika, a part-time cab drivers and a wedding car driver, the regulations have been especially challenging.
” I want to purchase a new vehicle so that I may continue my personal limo rental and work.” Without a automobile, without freedom, I am losing a lot of my income”, he said.
In a state with inadequate public transport, a vehicle can be critical, Sasikumar, a software professional from the northern city of Kandy explained.
A car is necessary to travel to other parts of the country because we lack a reliable public transportation system. Either the government should ease the car ban or make public transportation more efficient.
Prior to the ban, Sri Lanka imported about$ 1.4 billion worth of vehicles. The central bank announced this year that it would start a billion dollars for imports of cars, but that the money would be gradually released.
Arosha Rodrigo, a member of the Vehicle Importers Association of Sri Lanka, and his family have run a car dealership for more than 40 years.
Prior to the ban, the company was importing about 100 vehicles per month. They haven’t been able to import a single vehicle since the restrictions have been in place.
He points out that many people won’t be able to afford them because of higher taxes and Sri Lanka’s weak currency, even if the ban is relaxed further to allow the importation of passenger cars and other vehicles.
The government has sharply raised excise duties on imported vehicles, both new and second hand, to 200 % and 300 % depending on engine size.
On top of excise duty, there is also 18 % Value Added Tax (VAT ) for any vehicle brought from abroad.
The Sri Lankan rupee’s relative strength to major international currencies like the US dollar will also have an impact on the price of imported vehicles.
People like school teacher R Yasodha are turned off by these rising costs.
” We have been awaiting a vehicle purchase for a while. But if we calculate the tax and the price, the cost of an average sized car has doubled from 2.5 million rupees ($ 8, 450, £6, 800 ) to five million rupees”, she told the BBC.
” It would cost a lot for us,” he said.