By: Isuru Parakrama December 12, Colombo (LNW): A recent audit by the National Audit Office has revealed that the Sri Lankan government has lost approximately Rs. 1,384 million in tax revenue due to a significant increase in the luxury tax exemption limit for electric vehicle imports. This exemption, initially set at Rs.
6 million, was doubled to Rs. 12 million, resulting in financial losses for the state. The controversial scheme, which allowed Sri Lankan migrant workers to import electric vehicles, granted the exemption to 510 vehicles, raising questions about the effectiveness and oversight of the programme.
Launched in 2022 by the Ministry of Labour and Foreign Employment, the initiative was designed to incentivise remittances from Sri Lankan workers abroad by encouraging them to import electric vehicles. According to the audit report, the scheme issued a total of 1,077 permits between September 2022 and June 2024. However, 77 of these permits were later cancelled, and only 510 of the permit holders proceeded with importing vehicles.
The report further indicates that by June 2024, only 375 of the imported vehicles had been successfully registered with the Department of Motor Traffic. During this period, the scheme facilitated foreign remittances amounting to approximately US$ 121.5 million, while US$ 24.
1 million was spent on the importation of the vehicles. One of the key findings of the audit was the identification of significant lapses in internal controls and irregula.
