Customs struggling to meet revenue targets; vehicle import ban to be lifted soon?

The Sri Lanka Customs disclosed that they are unable to achieve the expected revenue from this year’s budget due to the restrictions imposed on the import of goods including the suspension of vehicle imports. This was disclosed at the Sectoral Oversight Committee on National Economic and Physical Plans.

Sri Lanka Customs officials stated the above at the Sectoral Oversight Committee on National Economic and Physical Plans Chaired by Mahindananda Aluthgamage which met recently to discuss the contribution of the Sri Lanka Customs in order to increase government revenue.

Aluthgamage said that Rs.1226 billion are expected as income of Sri Lanka Customs in this year’s budget and only Rs 330 billion have been received in these 5 months. Because of this, there is a problem of reaching the expected income from this budget.

Thus, the officials who were present said that this expected income cannot be reached until the import restrictions including the import of vehicles are in place. Under the said situation, they predict that the income that can be obtained this year is Rs 783 billion. The officials pointed out that the Ministry of Finance has also been informed about this. Moreover, they statistically pointed out that about 20% of the revenue received by the customs comes from the taxes imposed on the import of vehicles and until the restrictions on the import of vehicles are in place, this expected revenue cannot be reached. Furthermore, the officials said that the highest tax revenue from 2014 to 2022 was collected in the year 2018 and the tax amount was Rs 923 billion. Thus, it was mentioned here that Rs 194 billion have been received from the taxes imposed on the import of vehicles. Due to this, since the import of vehicles has been restricted for a period of 3 years, the income of the customs has decreased and if the import of vehicles is allowed from this month, within the next 6 months, Rs 150 billion can be collected as tax on the import of vehicles, the officials pointed out.

Because of this, the officials pointed out the possibility of importing vehicles under a credit line system with another country and that it is the best way to increase the customs revenue without going abroad. The officials also said that if the proposals of the customs are fulfilled, the revenue can reach around Rs 1100 billion.

Aluthgamage said that since discussions have already started on this matter, the government is working to take an urgent decision regarding the import of vehicles.