Is Vehicle Tax Charged Based on the Number of Airbags?

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Since vehicle imports were reopened, 451,770 vehicles have been imported so far. Although the government initially expected an income of Rs. 441 billion from these imports, the actual revenue has now increased to Rs. 904 billion, Deputy Minister of Economic Development Nishantha Jayaweera told Parliament on the 20th.

Meanwhile, several claims began spreading on social media saying that vehicle taxes are now charged based on the number of airbags in a vehicle. Some posts even claimed that sellers are removing airbags to reduce taxes.

Due to the wide circulation of these claims, FactCrescendo carried out a fact check to find out whether they are true.

(Social Media Posts) :

One widely shared post claimed “This country cares so much about people that it calculates vehicle tax by counting the number of airbags. Because of this, vehicle sellers are even removing existing airbags before selling cars.”

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After receiving several requests from the public to verify this claim, we decided to examine the facts.

Fact Check :

Sri Lankan Vehicle Taxes Structure

1. Official Taxes

Sri Lanka’s vehicle import tax system is based on six main taxes. Our review shows that none of these taxes are calculated based on airbags or other safety features.

Tax Item	Tax Rate	Basis
Customs Import Duty (CID)	20% of the CIF value	Applies equally to all vehicles
Surcharge	50% of the CID value	This increases the effective impact on CID by up to 30%
Excise Duty (XID)	50% – 300% of the CIF value	Based on engine capacity (cc) and vehicle age
Luxury Tax (LXT)	60% – 120%	Only for vehicles with a CIF value exceeding Rs. 5–6 million
Value Added Tax (VAT)	18%	Applies to the total tax base
Other Levies	Varies	Port and airport development charges, SSCL, etc.

There is no tax charged based on the number of airbags and whether a vehicle has airbags or not.

Excise Duty (XID):

The Main Tax on Vehicles.The Excise Duty (XID) is the largest tax charged when importing vehicles into Sri Lanka.

This tax is calculated only based on engine capacity (cubic centimeters – cc) and not on safety features such as airbags.

Vehicle Taxes Compared Based on Vehicle Types

Sri Lanka is among the countries with the highest vehicle import taxes in the world.

Vehicle Type	Total tax burden (relative to CIF value)
Petrol vehicles (≤1,500cc)	300% – 400%
Petrol vehicles (>1,800cc)	400% – 500%
Diesel vehicles	320% – 450%
Hybrid vehicles	200% – 300%
Electric vehicles (EV)	100% – 200%

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The 2013 Vehicle Valuation Debate.

The only time vehicle taxes and safety features like airbags were publicly discussed in Sri Lanka was in November 2013.

At that time, The Sunday Times reported that Sri Lanka Customs was adding the value of extra features, such as additional airbags, security alarms, and optional equipment, when calculating a vehicle’s value. This led to higher import taxes.

However, this was not a new tax on airbags and not a tax based on the number of airbags.

The issue was about how Customs calculated the value of vehicles, not about changing the tax system. Customs was accused of over valuing vehicles by adding optional features to the base price.

In other words, this was not a change to the tax structure. It was only an issue related to the method used to assess value.

The Customs Valuation Committee later examined the matter and made recommendations. It said that vehicle valuation should be based on the vehicle’s model, age, and condition. It also stated that individual features, such as airbags, should not be valued separately.

BYD ATTO 3 – Tax Debate Based on Software Features

During 2023–2024, a debate arose in Sri Lanka regarding the BYD ATTO 3 electric vehicle. The issue was whether taxes should be calculated based on software based features. These are features that operate through software.

The main question was whether features that already exist as hardware in the vehicle, but can be enabled or disabled through software, should be included in the vehicle’s value and tax. Examples include driver-assist systems.

However, this debate was only about taxing software based features. It was not about introducing a new tax on safety equipment such as airbags or ABS.

In other words, the BYD ATTO 3 case is not directly related to an “airbag tax.”

Announcement on the 2018 Vehicle Import Ban

On January 19, 2018, Sri Lanka’s Ministry of Finance officially announced a complete ban on importing vehicles without airbags.

From July 1, 2018, the import of motor vehicles that did not meet Euro IV or equivalent emission standards, as well as required safety standards, was fully prohibited.

This was not a tax related measure. It was only an import eligibility requirement. In other words, it set conditions that vehicles must meet to be imported into Sri Lanka.

The Ministry of Finance clearly outlined the mandatory safety standards for vehicle imports.

Mandatory safety requirements from July 2018 / January 2019

For the driver and front passenger:
Standard airbags (Driver & Front Passenger Airbags)

For all wheels:
ABS (Anti-Lock Braking System)

For seating:
Three-point seat belts for all front and rear seats (except the middle rear seat)

For emissions:
Compliance with Euro IV or equivalent emission standards

Vehicles that do not meet these requirements are not allowed to be imported.

The relevant Gazette notifications can be found here and here.

Vehicle taxes charged during import to Sri Lanka

CID (20% based on value)

Surcharge (50% of CID)

Excise Duty (varies by engine capacity)

Luxury Tax (if the value exceeds the threshold)

VAT (18%)

Port charges and other fees

On January 31, 2025, the government lifted the temporary vehicle import suspension that had been in place since 2022.Even under the 2025 policy update, airbag-related rules remain import eligibility requirements.No new tax system based on airbags has been introduced.

No evidence of airbag removal in Sri Lanka

There are no Cabinet decisions, Gazette notifications, or media reports to support claims of airbag-based taxation.

As of January 2026, no legal decision has been taken to impose taxes based on airbags. There are no Gazette notifications or Cabinet approvals on this matter.

We also inquired with the Media Division of Mass Media Minister Nalinda Jayatissa. They confirmed that this claim is false.

No mainstream media outlet has reported such a policy.

Ministry of Transport, Highways, Ports and Civil Aviation

The Ministry’s Media Division also confirmed that there is no system to tax vehicles based on airbags. They stated that the claim is false.

Vehicle importers

We contacted several vehicle importers. They said that no tax is charged based on airbags. They also denied claims that airbags are removed from imported vehicles. They confirmed that this information is false.

Sri Lanka Customs

Sri Lanka Customs Media Spokesperson and Customs Director Mr. Chandana Punchihewa said that taxes are not calculated based on airbags in imported vehicles.

The Motor Vehicle Division of Customs also confirmed that the number of airbags is not considered when calculating taxes.

Department of Motor Traffic

Acting Commissioner General Mr. Muthukumar said he is not aware of any decision to introduce a tax system based on the number of airbags.

Consumer Affairs Authority

We asked the Consumer Affairs Authority whether they had received complaints about airbags being removed from purchased vehicles.

They said no such complaints have been received.

Police Media Division

We also checked whether police stations had received complaints about airbags being removed due to taxation.

No such complaints have been reported.

Conclusion on social media claims

The only country with a documented policy related to the number of airbags is Israel.

Israel’s “Safety Accessories Tax Reduction” system provides tax reductions or incentives based on safety features, including airbags.

This system does not increase taxes for having airbags. Instead, it reduces taxes when safety features increase.

Common bases for vehicle tax calculations worldwide

In most countries, vehicle import taxes or vehicle taxes are mainly based on:
Vehicle value
Engine displacement (cc)
Carbon dioxide (CO₂) emissions and vehicle value
Vehicle weight
Vehicle type

More information on this can be found here and here.

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Conclusion : The claims circulating on social media that taxes have been increased based on the number of airbags in a vehicle are false. Claims that vehicle owners are removing airbags and selling vehicles because of this are also false.

No official legal notice, government Gazette, or policy document has been issued in Sri Lanka to support these claims. Relevant authorities have also confirmed that no such decision has been taken.

Globally, Israel is the only country that has a documented policy linked to the number of airbags. Even there, it is not a system that increases taxes for having more airbags. Instead, it provides tax incentives for vehicles with higher safety standards.