Customs suffered Rs. 6.1 bn loss due to negligence

…Rs 220 mn revenue denied due to fraud

By Saman Indrajith

Two leading palm oil companies had caused a loss of Rs. 6,130 million to the Sri Lanka Customs between 2013 and 2016, the Committee on Public Accounts (COPA) was informed, on Thursday.

The COPA was informed that an audit conducted by the Auditor General’s Department had revealed that the loss was due to the negligence on the part of Sri Lanka Customs officials, who failed to clear specific goods, under the Harmonized System (HS Code).

Although Secretary to the Treasury and Ministry of Finance, S.R. Attygalle, had already taken measures to investigate and recover the losses incurred by the state, the COPA directed the Sri Lanka Customs also to take immediate action in that regard, and Director General of Sri Lanka Customs Major General Vijitha Ravipriya agreed to do so.

The Director General of the Sri Lanka Customs and its high-ranking officials, officials of the Ministry of Finance and officials of the Auditor General’s Department were present at the Committee on Public Accounts meeting, chaired by Prof Tissa Vitharana.

It was also revealed that since 2013, the government had lost revenue to the tune of Rs. 220 million because importers had registered imported vehicles as dual-purpose vehicles for special purposes. A minimum of Rs.1,300 million could have been levied on 443 specialized vans, from 2010-2019, according to sources.

Another major irregularity revealed through the audit, pertaining to the importation of 10 vans and 414 lorries under special purpose vehicles, from the year 2010, was taken up for discussion by the Committee.

The Committee was informed that a luxury car, fraudulently registered as a special purpose vehicle, valued at nearly Rs. 9 million, had been released by the Sri Lanka Customs with a levy of only Rs. 1.5 million. Had the vehicles been cleared under the relevant category of vehicles, the levy payable to the Government would have been approximately Rs. 56 million. It was proposed to expedite the maintenance of a computer comparison system as previously recommended by the Committee with the concurrence of the Secretary to the Treasury and Ministry of Finance, following talks the Treasury Secretary Attygalle had with the Sri Lanka Customs and the Department of Motor Traffic.

The members of the Committee agreed to assist in the legislative process, if amendments to any Acts were required, for the aforesaid purpose.

Failure to implement an adequate internal control system, within the Sri Lanka Customs, pertaining to the process of imports and exports, following the release of six containers of perfume, worth Rs. 39,335,091, declared as medication, causing the government a loss of Rs. 40,761,600, and lack of punitive action against errant officials involved in the act of fraud, were revealed at the Committee meeting.

Taking into consideration issues such as the officials of Sri Lanka Customs responsible for generating 32.48% of the revenue for the year 2019 opposing a biometric attendance system, weaknesses of internal governance, issues pertaining to the recruitment of an Attorney and a Chief Internal Auditor for the Legal Department, members of the COPA mutually agreed to summon the Sri Lanka Customs again.

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