Sweeping changes to Customs in coming months

Thursday, 7 February 2019 01:33 -     - {{hitsCtrl.values.hits}}


Finance and Mass Media Minister Mangala Samaraweera and Customs Director General P. S. M Charles share a light moment at the press conference yesterday - Pic by Shehan Gunasekara


  • Mangala calls DG Customs ‘Iron Lady’, expresses full confidence in her to do the job

  • Says failure to meet revenue target is not her fault

  • Defends decision to appoint a former military personnel to the job

  • Says ‘business mafia’ running Customs responsible for leakages and loss of income 

  • Promises sweeping changes, including a special Committee to investigate corruption 

  • Customs DG report on investigations in two months

  • Drive-through scanners to go operational in March, automation system to kick off in April 


By Chathuri Dissanayake

Finance and Mass Media Minister Mangala Samaraweera lauded reinstated Customs Director General P.S.M. Charles with praise yesterday, expressing full confidence in her abilities to bring the ‘business mafia’ operating in the Port to book, with new systems set to be introduced in the Department. 

“She is an iron lady,” Minister Samaraweera said, praising Charles. 

“But I saw that even for her, who faced Prabhakaran fearlessly, the Mafia in the Ports Authority was a challenge. That is why I decided to take her into the Ministry and appoint a former Navy Officer to the post,” he said. 

 Justifying his move to appoint a retired Navy Officer, the Minister said that he took the decision to fight the “business mafia operating within the Customs in Colombo” noting that former military personnel now hold a number of civilian positions in the country, including diplomatic posts. “Customs is handled by a certain business mafia, and there are officials who aid this. The best example is the pepper and areca nut export business, where we lose so much of revenue,” he said. According to the Minister, the failure to achieve the revenue target set for the Customs Department led to the decision, but he insisted that the fault was not in the hands of the Director General. 

In 2018, the Department was only able to achieve 87% of its revenue target of Rs. 1.068 trillion, collecting only Rs. 921 billion. This, Samaraweera said, was achievable despite the change in tax base for vehicles, drop in vehicle number exports, and other external factors. Further, he noted that the Customs Department was not able to reap the benefits of the rupee’s depreciation as expected. Although imports grew by 8.3% compared to 2017, Customs revenue from imports for the period grew only by 1.4%, and Customs import duty on border tax saw a decline by 26.5%, he said. However, Customs has recorded a steady increase in revenue. 

To meet the revenue target set by the Ministry, the failure of which led to removal of DG Charles, the reinstated Director General is set to introduce a host of new measures, including the introduction of drive-through scanners and a special marine unit in Customs. 

“This is the biggest Department, operated for a long time. I need a little time to correct it and bring in the reforms. I have already informed the Minister, and I think I can do it,” Charles said, speaking to journalists at the Finance Ministry yesterday. 

The Customs Department has already set up the system for drive-through scanners, to be used in the approval process for exports, which will be operational from the first week of March, Charles told Daily FT. 

The scanning equipment, which will be handled by a third party, has already been set up, where the total scanning process will be over in minutes. The system has been linked to the Customs Head Office to enable fast processing of approvals needed for exports. 

“Approvals will be granted only after the scan, and this will help in eliminating smuggling, while increasing the revenue as well,” she said. 

Charles also referred to the much-discussed reforms to the Customs Ordinance, which is over 200 years old, noting that amendments are needed to reform the Department. 

“The Ordinance is over 200 years old, and a lot of things need to be reformed and systemised. We have set the automation and paperless trail system in place for approval, where the system can eliminate leakages, manipulations, and fraudulent activities. We have started investigations, and I have sent the primary report to the Minister. Within another two months I can send the full investigation report,” she said. 

The legal amendments needed to kick off the automation system is now awaiting approval from the Attorney General, Charles said, adding that the technology needed for the system is already in place, ready to be implemented once the Ordinance is amended.

Samaraweera said that once investigation reports are presented to him, a Cabinet Sub-Committee which will also include a retired judge will be appointed to suggest reforms in the Department. 

“I plan to appoint a Committee headed by a retired judge to investigate into frauds and corruption in the Ports within a month of receiving the reports. I expect there will be a lot of reforms in the coming months. A new Customs Act will be introduced to address the modern needs,” he said. 


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