AliExpress, Temu e-commerce tax dispute resolved, officials tell CoPF

Tuesday, 5 August 2025 03:30 - - {{hitsCtrl.values.hits}}

The Committee on Public Finance (CoPF) has been informed that the recent issues surrounding the taxation of e-commerce goods have now been resolved. Officials told the committee that operations are proceeding without disruptions following earlier delays caused by the reintroduction of Harmonised System (HS) code-based taxation, according to a statement from the Parliament’s Department of Communication yesterday.

Previously, Sri Lanka Customs cleared low-value imports from platforms such as AliExpress and Temu based on weight. However, a policy shift to charge taxes based on HS codes resulted in a bottleneck at Customs and disrupted service flows. AliExpress subsequently withdrew its low-cost shipping options to Sri Lanka, citing unclear tax rules and regulatory unpredictability.

The suspension of affordable shipping services like AliExpress Standard Shipping and Cainiao came into effect on 7 July. These logistics options were widely used by Sri Lankan consumers for purchasing electronics, apparel, and household goods. In a notice to sellers, AliExpress stated that logistics routes to Sri Lanka and Pakistan would now require offline processing, eliminating budget delivery selections at checkout.

The lack of a clear minimum threshold for duty-free imports was a central factor in the dispute. Most countries allow duty-free imports below a set value, such as $ 100 or € 150. Sri Lanka’s move to enforce HS code taxation without exemptions led to confusion and public dissatisfaction.

At the time, a Government minister suggested that the change was intended to protect domestic producers, prompting backlash from consumers, who argued that such protections primarily benefit uncompetitive local businesses at the expense of affordability and choice.

In July 2025, the Cabinet approved a proposal by President Anura Kumara Disanayake to appoint a committee to address the growing number of e-commerce parcels stuck at Sri Lanka Customs. The committee was tasked with providing immediate operational solutions to clear the backlog and recommending a longer-term regulatory framework.

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