By: Staff Writer
February 23, Colombo (LNW): The government’s decision to revise driving licence fees and widen compulsory social security coverage for segments of the transport sector marks one of the most consequential regulatory shifts in recent years. Approved by the Ministerial Consultative Committee on Transport, Highways and Urban Development, the measures were formalised through two Extraordinary Gazette notifications under the Motor Traffic Act.
The first regulation revises the fee structure for driving licences. The second extends the validity period of licences an adjustment officials say is designed to streamline renewals and reduce administrative congestion. While the extension appears consumer-friendly, the fee hike has triggered concern among commercial drivers already grappling with rising fuel and maintenance costs.
Behind the technical language of Gazette numbers lies a broader fiscal and policy recalibration. Licence fees are a significant non-tax revenue source. Increasing them during a period of economic adjustment raises questions about whether the move is aimed at improving road safety administration or shoring up public finances.
More transformative, however, is a recommendation to make contributions to the Employees’ Provident Fund and the Employees’ Trust Fund compulsory for private bus drivers, conductors, three-wheeler operators, and app-based transport workers. At present, many of these workers operate in the informal economy, without structured retirement savings or employer-backed protections.
Under existing law, private and semi-government employees contribute 8 percent of their wages to EPF, while employers pay 12 percent to EPF and 3 percent to ETF creating a combined 23 percent monthly contribution. Extending this framework to transport service providers would represent a structural shift in how gig and informal labour is classified.
Ride-hailing platforms currently treat drivers as independent contractors, excluding them from mandatory employer contributions. If enforced, the new recommendation would compel either platform companies or vehicle owners to assume employer status potentially increasing operating costs significantly.
Industry insiders warn that higher compliance costs may be passed on to commuters through fare adjustments. Three-wheeler drivers, who form a politically sensitive voting bloc, fear reduced take-home income if contributions are deducted without corresponding fare revisions.
The proposal also raises enforcement questions. Monitoring thousands of semi-formal operators requires administrative capacity and digital tracking mechanisms that Sri Lanka’s labour authorities have historically struggled to maintain.
Yet proponents argue the reform addresses long-standing inequities. Informal transport workers lack pension security and insurance buffers. In the event of illness or retirement, many depend solely on personal savings. Integrating them into formal social security systems could improve long-term financial resilience and reduce future welfare burdens.
The viability of these reforms hinges on policy consistency. Sudden fee hikes and mandatory contributions risk resistance if implemented without phased consultation. Transparent timelines, digital registration frameworks, and clarity on employer liability will determine whether the reforms modernise the sector or deepen financial strain on drivers already navigating narrow margins.
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