Sri Lanka's Duty-Free Vehicle Permits for Officials: IMF Commitment

What was announced

Lanka Business Online (30 May 2026) reports that the government pledged to abolish the long-standing duty-free vehicle import scheme for public officials, with cancellation of existing permits to be formalised in the 2027 Budget. The commitment appears in the Memorandum of Economic and Financial Policies (MEFP) attached to the IMF Country Report No. 26/111 (May 2026).

The wording

The MEFP, as quoted by Lanka Business Online, says the government is committed to cancelling tax exemptions on motor vehicle imports for public officials, will maintain the suspension on use of the permits, and will review the mechanism to discontinue the scheme and cancel the existing permits in the 2027 Budget. The document estimates the cost of those permits at potentially 0.6 per cent of GDP.

Background

The report says the suspension of duty-free permits was maintained from 31 January 2025, in line with revenue-based fiscal consolidation goals under the IMF's Extended Fund Facility.

What it means for readers

• It is a policy commitment, not yet law. The mechanism will be set in the 2027 Budget, which we have not seen.
• Holders of existing permits should watch the Budget announcement for transition terms. We do not know them.
• It does not change the duty rules for ordinary imports, covered in our other posts.

Fact-checked on 30 October 2026 against the sources listed below. Tax rules and prices change by gazette, so confirm with Sri Lanka Customs or the Ministry of Finance before you pay.