By: Staff Writer
November 09, Colombo (LNW): In a striking development this week, Sri Lanka Customs announced a historic one‑day collection of Rs 27.7 billion on Thursday 6, pushing its year‑to‑date haul beyond Rs 2 trillion and surpassing its 2025 target ahead of schedule. According to official figures, Rs 630 billion of this total comes from motor vehicle imports, boosted by eased import restrictions.
Yet behind the fanfare lies a deeper question: how has an institution long plagued by corruption and inefficiency suddenly delivered such dramatic results with largely the same officials and structural vulnerabilities in place?
A history of embedded corruption
The IMF’s Governance Diagnostic Assessment for Sri Lanka found that corruption in customs and tax administration is “substantial”, owing to deficient oversight, performance monitoring and sanction mechanisms for officials.
Corruption‑risk research documented that the private sector rates Sri Lanka Customs among the most problematic agencies when it comes to bribes, harassment and discretionary misconduct.
A widely cited scandal involved three senior Customs officers arrested in 2016 for soliciting Rs 125 million in bribes from an importer in exchange for favourable treatment.
More broadly, research shows that the examination yards, classification decisions, and import duty rebates have long offered fertile ground for rent‑seeking by officials and traders alike.
So what’s changed and is it genuine?
The leap past Rs 2 trillion in revenue suggests improved compliance, stronger import flows and perhaps more aggressive duty‑collection. The government, in cooperation with the World Bank, is advancing reforms within Sri Lanka Customs including structural changes to align with modern trade facilitation and integrity standards.
Yet still, several red flags remain. The very powers that enabled corruption — discretionary classification, physical inspections, duty waivers are still embedded. The IMF noted that the revenue agencies, including Customs, operate under a framework where the human‑element still dominates and digitisation remains incomplete.
Furthermore, while collection has surged, trade‑clearance delays continue to persist — an indication that efficiency gains may not be uniform. A December 2024 article found containers still waiting days at examination yards, increasing opportunities for informal payments and increased costs for businesses.
On one hand, the strong fiscal performance is welcome: higher revenue means greater resources to service debt and stabilise the economy. On the other hand, if the same set of customs officials accustomed to discretionary powers and limited accountability are driving the collections, the risk of informal tolls, mis‑classification or selective enforcement cannot be ignored.
Insiders caution that the jump in vehicle‑import duties, for instance, may simply shift the burden to importers who have fewer alternatives — thereby increasing the temptation for shortcut payments. The fact that Rs 630 billion of the total relates to motor vehicles is telling: high‑value items, fewer importers, concentrated transactions precisely the conditions where corruption thives.
Why it matters
• For importers and exporters, the question is whether the new revenue push means more transparent treatment or simply more aggressive enforcement that replaces bribes with steep taxes and penalties.
• For government policy, the danger is that the “success” in revenue may mask the underlying systemic risks: a customs agency that still has weak oversight, opaque processes and inadequate rotation or discipline of staff.
• For the economy, reliance on high‑duty imports (like vehicles) raises concerns about sustainability and casts doubt on whether increased revenue serves long‑term trade competitiveness rather than short‑term fiscal needs.
The path ahead
To move beyond the cycle of “same officials, new numbers,” the reforms will need to embed:
full‑scale digitisation of import/export workflows, limiting human discretion;
independent internal‑affairs units inside Customs empowered to investigate misconduct;
transparent public‑reporting on clearance times, classifications and duty waivers.
Without these, the dramatic Rs 2 trillion milestone may end up highlighting a one‑off revenue spike not a structural transformation. The story of Sri Lanka Customs now is one of both hope and caution: record collections are welcome, but unless the culture of discretion and corruption is cleaned out, the society may still be paying the real price.
