Tightening the screws on vehicle imports

Colombo (News1st) - The Monetary Board of the Central Bank imposed a 100% margin deposit requirement against Letters of Credit opened with commercial banks for the import of motor vehicles, which are generally used for non-commercial purposes. The Central Bank says the decision to impose the margin deposit requirement is based on recent developments which, if not addressed, could threaten macroeconomic stability. It adds the imposition of the margin deposit requirement, together with the measures already taken by the government with regard to taxes applicable on motor vehicle imports, is expected to curb non-essential imports of motor vehicles, and ease undue pressure on the current account of the balance of payments and the exchange rate. The Ministry of Finance also announced that the 30% CESS imposed on Sanitary napkins will be removed from today.