By: Staff Writer
September 01, Colombo (LNW): Sri Lanka Customs (SLC), the government’s most critical revenue collection arm, has reported an impressive performance this year, surpassing its 2025 target of Rs. 2,115 billion by Rs. 142 billion as of last week. While the figures appear promising, questions remain as to whether such momentum can be sustained under current institutional and political constraints.
The early success has been largely attributed to anti-corruption reforms and increased import duties on vehicles—a sector that remains highly sensitive to policy shifts. Last year too, Customs posted its highest-ever collection of Rs. 1,533 billion despite import restrictions. However, analysts warn that the real test lies not in the mid-year surge but in sustaining the pace through December.
The ongoing anti-corruption drive, while commendable, has created a culture of fear among mid- and lower-level officials. Several officers are reluctant to take decisions or offer guidance on technical disputes, fearing reprisals under investigations. Industry insiders argue this hesitation has slowed clearance processes at Colombo Port, leading to costly delays for transshipment operations. If prolonged, such bottlenecks could erode investor confidence in Sri Lanka’s trade hub ambitions.
Technology-driven reforms like the ASYHUB digital platform and e-bidding system, due for rollout later this year, promise greater efficiency and transparency. Yet, SLC’s dependence on external funding from UNCTAD, the World Bank, and IMF means implementation may be uneven. Even the “Single Window” project, slated for completion in 2–3 years, underscores how structural transformation is a long-term process—not an immediate revenue booster.
The broader revenue strategy is also vulnerable to external shocks. Customs income depends heavily on imports, but with domestic demand suppressed and global trade flows uncertain, sustaining high revenue levels could prove difficult. Furthermore, the government’s anti-corruption narrative has inadvertently weakened internal morale, making it harder to achieve ambitious reforms without stronger institutional support.
In theory, the 2025 target has already been exceeded. But in practice, Customs’ ability to maintain momentum depends on resolving operational slowdowns, balancing anti-graft vigilance with pragmatic decision-making, and cushioning against global market fluctuations. Without addressing these structural challenges, Sri Lanka may find itself celebrating temporary revenue spikes while undermining the long-term credibility of its revenue collection system.
