Sri Lanka Customs earns Rs.225 mln from misclassified mandarin import

Friday July 4, 2025 5:30 pm

ECONOMYNEXT – Sri Lanka Customs has earned 225 million rupees from misclassified mandarin imports after officials detected some traders importing under wrong classification to evade duty, its Spokesman Seevali Arukgoda said.

“We have earned 225 million from the detection of misclassification of Kinnow hybrid mandarin,” Arukgoda told EconomyNext.

Kinnow is a hybrid variety of mandarin and imported by Sri Lankan traders mainly from Pakistan for more than two decades under Pakistan-Sri Lanka Free Trade Agreement (PSFTA).

Both mandarin and its hybrids had been classified under the same HS code until the World Customs Organization in 2017 revised the classification with pure mandarin separate from hybrids of mandarins.

Importers, however, had declared the Kinnow incorrectly under the same HS code used for pure mandarin which is given tax concession under the PSFTA, the sources said.

Sri Lanka Customs has detected the error recently and advised the importers to change the HS code accordingly.

“We recovered the import duty from the importers considering Kinnow under the separate HS code,” Arukgoda said.

Customs sources said there is no no provision to give grace period for importers as well as reduction in duty as per the laws. (Colombo/July 04/2025)

Friday July 4, 2025 7:27 pm

ECONOMYNEXT – Sri Lanka has urged Japan back its existing yen-loan projects in order to attract further investment and secure gap financing, the island nation’s Finance Ministry said in a statement.

The Japan-Sri Lanka Economic Cooperation Policy Dialogue was held on Friday (04) in Colombo in order to exchange views on the matters pertaining to the Japanese funded project portfolio and exploring the future development and prospective economic cooperation policies between Japan and Sri Lanka.

The Japanese delegation was led by Ishizuki Hideo, Assistant Minister/ Director General, International Cooperation Bureau, Ministry of Foreign Affairs of Japan.

Harshana Suriyapperuma, the newly appointed Finance Ministry/Treasury Secretary, leading the Sri Lankan delegation requested the continued cooperation of Japan, including support for existing Yen loan projects, in order to attract further investment and secure gap financing.

“He also emphasized the need for both technical and financial assistance to advance Sri Lanka’s ongoing reform programme, which is aligned with the IMF programme,” the Finance Ministry said in a statement.

Ishizuki emphasized that Japan will advance its efforts to achieve the goals of Sustainable Development Goals (SDGs) including poverty eradication, reducing disparities, and addressing climate change—as part of its broader aim to realize the concept of human security.

The Japanese Assistant Foreign Minister outlined three key pillars through which Japan intends to support Sri Lanka’s economic recovery and long-term stabilization which include fiscal and structural reforms and enhancement of economic foundation for sustainable economic growth, enhancing social resilience, as ensuring peace and stability, the Finance Ministry said in the statement.

“The two sides also exchanged views on Japan’s future economic cooperation with Sri Lanka, including the existing Yen loan projects, to stabilize and reinforce Sri Lanka’s economy as well as overcome its socio-economic challenges.

Ishizuki stated that “Japan will continue to provide support to the people of Sri Lanka to help the country fully recover from the economic crisis as soon as possible and return to a path of progressive development.” (Colombo/July 04/2025)

Friday July 4, 2025 4:49 pm

ECONOMYNEXT – Sri Lanka’s rupee closed weaker at 300.10/20 to the US dollar in the spot market on Friday from 299.97/300.05 a day earlier, dealers said, while bond yields were up.

A bond maturing on 15.12.2026 closed at 8.00/15 percent, from 8.01/10 percent.

A bond maturing on 15.09.2027 closed at 8.40/50 percent, from 8.33/45 percent.

A bond maturing on 15.10.2028 closed at 8.83/88 percent, from 8.78/83 percent.

A bond maturing on 15.12.2029 closed at 9.42/45 percent from 9.36/40 percent.

A bond maturing on 15.03.2031 closed at 9.90/10.00 percent, from 9.90/95 percent.

A bond maturing on 15.12.2032 closed at 10.35/42 percent, from 10.33/38 percent.

A bond maturing on 01.11.2033 closed at 10.60/68 percent, from 10.60/65 percent. (Colombo/Jul4/2025)

Friday July 4, 2025 4:35 pm

ECONOMYNEXT – Sri Lanka Customs is likely to exceed its revenue target of Rs.2,115 billion set by the government for this year due to more imports and detections, its Spokesman Seevali Arukgoda said.

Sri Lanka Customs reached Rs.1,000 billion revenue target on Thursday (03), which is 47.3 percent of this year’s revenue target.

“As of today, we have exceeded our target by 50 billion rupees,” Customs Spokesman Arukgoda told EconomyNext.

“Last year, it took us nine months to achieve one trillion (1,000 billion) rupee target. But this year, we have achieved it in six months.”

“So, we are likely to exceed the target this year because there is higher seasonal import in the latter part of the year.”

Historically, Customs revenue has contributed significantly to total government income, often accounting for more than 40% of total tax revenue.

However, since the 2019 tax cuts introduced by the previous administration, Customs income has seen notable fluctuations, as reduced import duties and a sharp decline in imports during the COVID-19 pandemic drastically lowered collections between 2020 and 2022.

In 2023, Sri Lanka Customs faced the challenge of meeting ambitious revenue targets amid a fragile economic recovery and declining import volumes due to import restrictions imposed to manage the foreign exchange crisis.

“We exceeded our revenue target in the last two years. So we will be exceeding the revenue target this year for the third consecutive year,” Arukgoda said.

With the country under an International Monetary Fund (IMF) program, the government increasingly depended on Customs and Inland Revenue collections to meet fiscal benchmarks required for external financing.

The revenue targets for the Customs in both this and last years have been aimed at strengthening domestic resource mobilization and reducing fiscal deficits.

Reforms focused on improving risk-based inspection, automating clearance systems, and cracking down on revenue leakages such as under-invoicing and false declarations.

The Customs has been in the process of recovering duty from those who had been under-invoicing and declaring false information on their imports.

Consistent shortfalls in trade volumes, slow recovery in domestic demand, and smuggling challenges continue to pressure Customs’ ability to consistently meet its revenue goals. (Colombo/July 04/2025)