The new manufacturing levy will come into force at midnight Saturday and affect Indian brands of motor vehicles which dominate the island.
As a result of the hike, a 1000 cc car would attract a total tax payment at the point of import at 200 per cent, as opposed to 120 per cent earlier.
Petrol-powered three-wheelers, a market dominated by India's Bajaj Auto here would now be paying a total tax of 100 per cent of the value against the previous 51 per cent.
The Sri Lankan Treasury said the decision was taken in view of the increasing number of vehicles populating the island's roads since 2009.
Vehicle imports have gone up from 3,421 units in 2009, to 37,134 units in 2010, and to 54,285 units in 2011, the treasury said.
Expenditure on petroleum imports increased by 18.9 per cent to USD 484 million in January 2012, over the same month last year, the Central Bank said.
The expenditure on imports increased by 20.1 per cent to USD 1,883 million in January 2012.
In another move to raise government revenue, the taxes have also been raised for imported beer and sales tax for cigarettes and local beer.