Financial Times - Customs raised billions of rupees in import taxes in 2005

Customs raised billions of rupees in import taxes in 2005

Sri Lanka’s Customs collected Rs. 190 billion of taxes on imports which was a sizable portion of the total government revenues which amounted to Rs. 390 billion or 58% of such revenue, Customs Director-General Sarath Jayatillake said.

Speaking at the recent “The Key Persons Forum” organized by the Federation of Chambers of Commerce & Industry of Sri Lanka and its subsidiary, Small & Medium Enterprise Developers (SMED), he said the increased revenue generated from customs duty and tax last year also contributed significantly to the increased state revenue(21.7% increase).

He said of the revenue generated, 30% was from vehicle importation. In this regard the duty on petrol driven vehicles was 170% and diesel vehicles 200%, he added.

The meeting was presided over by the President of the Federation Nawaz Rajabdeen.

According to the Director-General, duties including the excise duty was used as an instrument to protect local industry. It was also utilized specially as a deterrent against rampaging imports as well as dumping which involved the importation of sub standard products taking advantage of the low duty regime prevalent in Sri Lanka.

Referring to the large scale tax evasion experienced in respect of cell phones, he said many Sri Lankans who travelled abroad concealed such phones, purchased overseas on their return and did not declare them because of the high rate of duty imposed.

On protecting Sri Lanka’s image, Jayatillake referred to the large scale exports of cloves from Sri Lanka to India so much so that the Indian customs’ authorities jokingly stated that it appeared that the whole of Sri Lanka was engaged in the growing of cloves. Such exports patently involved unacceptable and fraudulent shipping practices and an obvious party conniving with the shippers in this regard were the shipping agents.

He said such malpractices affected the integrity and image of the local trading community and in turn adversely affected the country’s image.

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