- Revenue drops amidst import restrictions
Sri Lanka Customs is in the process of improving its monitoring mechanism for valuation of imported goods in order to increase its reduced revenue due to the import restrictions that are in place, The Daily Morning Business learned.
Speaking to The Daily Morning Business yesterday (19) Sri Lanka Customs Senior Director and Media Spokesperson, Sudath Silva stated: “We are strengthening our monitoring mechanism in order to ensure that people provide the correct values to the Customs. Through this, we are trying to fix vulnerable areas such as forged valuations etc. This would enable us to collect more revenue.”
He noted that one of the major challenges that the Sri lanka Customs encounters, is that people declare a reduced value for imported goods. As a result of this, the collection of tax revenue is subjected to reduction. Therefore, the Sri Lanka Customs is to strengthen its procedures to identify a proper valuation mechanism.
He added that the Sri Lanka Customs has been experiencing a shortfall in its revenue “drastically over the last two years” with the imposed import restrictions, and as a result, the import value has come down which has led to the Sri Lanka Customs making a request to the State Minister of Finance Ranjith Siyambalapitiya to revisit these temporary restrictions “gradually”.
The Daily Morning Business inquired from the Senior Director of Customs on the possible repercussions that might be caused to the country because of this request, to which he responded, saying: “There will be further study to identify the commodities which can be removed from the restricted list, without having any stress on the foreign exchange. A proper study will be carried out by the respective officials of either or both the Central Bank of Sri Lanka (CBSL) and the Ministry of Finance.”
Also, he stressed that the Sri Lanka Customs has no provisions to ease the import restrictions despite the revenue shortfall. It has to collect tax from the imported goods instead. In order to collect duty fees, the people must import.
“We are not going to suggest anything (goods to relax for importation). Our purview is to collect tax. What are the restrictions, what imports should be restricted etc. are decided by the Central Bank along with the Ministry of Finance or vice versa.”
In order to mitigate the dwindling foreign reserves in the country, motor vehicle importation was suspended by the GoSL as they are one of the major foreign exchange draining commodities. However, they are one of the top 10 commodities that generate higher revenue for the Sri Lanka Customs.