Issues surrounding the Sri Lanka Customs, such as corruption and financial mismanagement, which have remained a topic of discussion for years, have received more attention with the economic crisis and the recent ‘work-to-rule’ action that triggered a backlog at the Colombo Port, causing the new Government to crack the whip against one of the oldest State institutions which has long had a culture of impunity. 

Let’s be honest, it has long been public knowledge that there was rampant corruption in the Customs Department. Few before have had the political will to fix the issue, which some observers have linked to long-standing links between political parties and businessmen who abuse the Customs apparatus to make more profits.  

Yesterday, President Anura Kumara Dissanayake stated that structural reforms would be implemented within the Sri Lanka Customs to establish an institutional framework that aligns with contemporary needs. President Dissanayake made these remarks during a discussion held with senior officials of Customs yesterday (5) at the Presidential Secretariat regarding the 2025 Budget, its targets and the institutional restructuring. The discussion also addressed critical issues such as inefficiencies, fraud, corruption, and public dissatisfaction with the current functioning of the Customs Department, the Presidential Media Division said. President Dissanayake had emphasised the need to accelerate the adoption of new technologies aimed at improving the efficiency and transparency of departmental operations and directed the officials to enforce stringent laws aimed at eliminating inefficiencies within the Customs Department. He had also emphasised the need to expedite human resource management, streamlining the recruitment processes, and the acceleration of infrastructure development. Measures needed to be adopted for Customs to reach the revenue target for the current year, had also been discussed.

In 2023, an audit conducted by the National Audit Office, flagged certain discrepancies and flaws within the Customs Department. The audit’s findings have raised concerns about a massive loss of government revenue as well as questionable rewards to Customs officials. The findings shed light on a systemic failure within the Customs’ enforcement mechanisms, potentially costing the Government a substantial amount of uncollected taxes. Moreover, the audit had highlighted a concerning trend where some imports for which penalties should have been levied had not been properly scrutinised, resulting in the Government missing out on much-needed tax revenue owed. The lost tax revenue had been treated as penalties, with an amount of 50% of the penalty amount being allocated for rewarding officials and informants.

While financial mismanagement and/or corruption are the obvious potential issues this situation has highlighted, it also shows how the Government suffered losses due to such irregularities or weaknesses. The magnitude of this issue was further shown by the said audit’s findings that rewards of around Rs. 3,924 million had been distributed during a period of mere five years, i.e. between 2016 and 2021. Alarmingly, that astronomical amount had been distributed among only the top 100 officers, while five individuals are reported to have received payments exceeding Rs. 60 million during the same period.

It goes without saying that Customs is one of the most crucial State sector institutes, especially in the present economic situation, not only for revenue raising but also as a key border control and law enforcement agency. It has a vital national security function as well.

The fact that the Customs Department has long resisted State-sector reforms by utilising their powerful trade union is a well-known fact. The tantrums the Customs Department threw when it was proposed that CCTV cameras and thumbprint-biometric attendance and access control was to be introduced was a clear indication the ‘self-serving’ powerful interest pushed by their trade union was against the ‘national interest’ of Sri Lanka. However, it must be clearly stated that the rotten apples in the Customs barrel are a minority, and that a majority of the officers who work diligently within are not in cahoots with the few who are corrupt. It seems the corrupt clan of Customs officers are today trying their old tactics to eject the new Director-General who has been appointed by the new Government to clean house. They are also clearly not happy to comply with new regulations.  Given the anti-corruption mandate that this Government has stood on, now would be a good time to put the Customs Department and similar enforcement agencies such as the Department of Immigration and Emigration in order.