Buying a Car in Sri Lanka: Understanding Taxes, Duties, and Fees

When you decide to buy a car in Sri Lanka, navigating the complex web of taxes, duties, and fees is crucial. The process can be daunting, with costs often adding up to 130-300% more than the vehicle’s original price. Understanding these charges is essential for making an informed purchase.

The primary factor affecting the cost is the type of vehicle. Taxes and duties vary significantly across different classes of vehicles, with luxury cars attracting higher rates. Additionally, the age of the vehicle plays a role; newer cars are taxed differently than older models.

Import duties are another significant component. They are calculated based on the vehicle’s value, which, for used cars, should not be below 85% of a similar new car’s manufacturer’s value, excluding local taxes, at the country of export3. This ensures that the duties reflect the true worth of the vehicle.

Moreover, recent changes in policy mean that from January 2024, individuals must open a tax file before purchasing a vehicle. This move aims to streamline the tax process but also adds an extra step for buyers.

For those looking to navigate this intricate landscape, a trusted partner can be invaluable. Indra Traders offers expertise and support, ensuring that your car buying experience is as smooth and transparent as possible.