Customs under fire over new vehicle valuation system
View(s):Sri Lanka Custom’s new vehicle valuation system to calculate duty and taxes on imports has opened the gates for bribery and corruption, motor traders allege
They urged the Treasury to direct the Department of Customs to ensure valuation of imported vehicles in a transparent manner and prevent a few selected custom officers of the valuation committee from determining the value without considering the imported price of the vehicle paid before or after it has been loaded onto a ship.
Customs duty is calculated on the valuation of the vehicle by the manufacturer, which will start at the basic cost of the car and added to this are the various options that the car is fitted with and the cost of freight and insurance. The total is referred to as the customs value. Officers attached to the valuation committee are now obtaining the manufacturer’s value from various sources to calculate cost, insurance and freight CIF value and fixing the price of the vehicle to impose duty and taxes in an arbitrary manner, Ceylon Motor Traders Association (CMTA) Chairman Gihan Pilapitiya told the Business Times.
These officers are the sole authority in determining the value of the imported vehicle and therefore they can manipulate it when imposing duty and taxes as the Treasury has issued a directive to customs not to accept the authorized agent’s valuation, he added. According to this method of valuation, the value of the vehicle is higher than that of the actual value stipulated by the agent, he said, adding that the CMTA has made representations to the Treasury to no avail. Sri Lanka should follow the World Trade Organisation (WTO) agreement on customs valuation for a fair, uniform and neutral system for the valuation of goods for customs purposes – a system that conforms to commercial realities, he suggested.
The declared imported value of a vehicle depends on the country of importation. T3herefore it is essential to follow a system that conforms to commercial realities, he said.