Customs negligence causes Rs. 6.1 b in tax losses from two oil companies: COPA

• Losses incurred from 2013-2016, according to Auditor General
• Over Rs. 220 m losses from vehicle imports since 2013 due to registering as dual-purpose vehicles
• COPA directs DG Customs to conduct proper inquiries into lapses

Negligence by Customs officials had led to tax revenue losses of about Rs. 6130 million between 2013 and 2016 due from two leading palm oil companies, the Parliamentary Committee on Public Accounts (COPA) was informed this week.  An audit conducted by the Auditor General’s Department revealed that the loss of money was due to the negligence on the part of Sri Lanka Customs officials having failed to clear specific goods under the Harmonised System (HS Code) within the relevant classification, the Committee heard.

Committee Chair-man Professor Tissa Vitarana said that while the Secretary to the Ministry Finance R.S Attygalle had already taken measures to investigate and recover the losses incurred by the Government, the Customs Department too should take immediate action.

Sri Lanka Customs Director General Major General Vijitha Ravipriya said an inquiry would be held into the losses in revenue and identify those responsible for these lapses. At the COPA meeting, it also came to light that since 2013, the Government had lost revenue of Rs. 220 million because importers had registered imported vehicles as dual-purpose vehicles for special purposes.

Another major irregularity was revealed through the audit pertaining the importation of 10 vans and 414 lorries under special purpose vehicles from the year 2010, which was also discussed by the Committee.

A luxury car valued at nearly Rs. 9 million has been released by Sri Lanka Customs under a levy of only Rs. 1.5 million, having registered it under special purpose vehicles. Had the vehicle been cleared under the relevant category of vehicles, the levy payable to the Government would be much higher.

COPA said the Customs should expedite the maintaining of an automated computer comparison system as previously recommended by the committee in concurrence with the Ministry of Finance and the Department of Motor Traffic.

The members of the committee agreed to assist in the legislative process if amendments to any Acts are required for the aforesaid purpose.

It was also disclosed during the COPA meeting that six containers of perfume belonging to an importer worth Rs. 39,335,091 had been cleared in six instances after the imported goods were classified as medication, causing State coffers a loss of Rs. 40,761,600. However, no action had been taken against the officials responsible for such losses.

The Sri Lanka Customs Director General and its high-ranking officials, officials of the Ministry of Finance, and officials of the Auditor General’s Department attended the COPA meeting on Thursday.

Members of the Committee including State Minister Dayasiri Jayasekara, Shehan Semasinghe and Prasanna Ranaweera and MPs Tissa Attanayake, Ashoka Abeysinghe, Gunapala Ratnasekera, Weerasumana Weerasinghe, Ranjith Bandara, Niroshan Perera, Gamini Waleboda, S. Shritharan, Prof. Harini Amarasuriya and Upul Galappaththi were present at the meeting.