Foreign remittances from Sri Lankans living abroad have surged by 75% compared to the previous year, according to the State Minister of Finance, Ranjith Siyabalapitiya. He made the announcement during a parliament session on October 19th, highlighting the role of several initiatives and incentives given to Sri Lankans living abroad as the primary reasons for this increase.
One of the schemes that has boosted foreign remittances is the vehicle import license offered to Sri Lankans living abroad. This initiative has encouraged high-net-worth individuals living abroad as permanent residents or dual citizenship holders to send money to Sri Lanka to be entitled to import a fully electric brand-new vehicle after paying the standard stipulated duties and tariffs.
The scheme is not a duty-free import scheme, but only an import license for fully electric vehicles. The individual’s foreign exchange is used to import the vehicle, and it has no effect on the country’s foreign reserves. Due to this scheme, Sri Lanka Customs has made billions in Customs revenue, as this scheme is a fully duty-paid scheme, and no duty concessions are offered mainly to high-valued luxury vehicles.
A Senior Official at the Ministry of Labour and Foreign Employment confirmed that this new initiative has encouraged a new category of individuals to send much-needed foreign remittances to Sri Lanka. The Sri Lanka Customs’ motor vehicle directorate also confirmed that due to this scheme, there was a significant increase in Customs revenue.
The surge in foreign remittances is a welcome boost for Sri Lanka’s economy, which has been hit hard by the COVID-19 pandemic and the recent economic crisis. The Sri Lankan government’s initiative to incentivize its diaspora community to invest in the country’s economy has yielded positive results. With more such initiatives, Sri Lanka can continue to attract more foreign remittances and investment from its diaspora community.
