Sri Lanka Customs to leverage AI technology for more efficient service
The Government is revamping the Customs Department amid concerns of inefficiency, corruption and drop in revenue collection, while reviewing relevant laws, regulations, administrative guidelines and standard operating procedures
Artificial Intelligence (AI) technology will be introduced ensuring the minimising of human intervention in import and export procedures while establishing one clearing centre in collaboration with the Ports and Sri Lanka Customs.
The department has been directed to strengthen IT-based tax administration, and improve capacity development, including a revenue administration diagnostic assessment in addition to the transparency of audit.
Sri Lanka Customs is losing its revenue due to the absence of a proper regulatory mechanism to verify and compare the value of exports from Sri Lanka Customs at the loading port and the unloading port and due to the hardships faced when assessing the values of goods, a senior Finance Ministry official said.
In order to prevent mis-invoicing in imports and exports trade, Sri Lanka Customs is set to fully digitalise trade processes, he said adding that it will prevent under- and over-invoicing of businessmen.
He added that it will also enable the seamless electronic exchange and legal recognition of trade related data and documents across borders, rather than only among stakeholders of the same country.
A Common Container Yard is expected to be built in Kerawalapitiya to inspect all containers with the participation of the Sri Lanka Customs by integrating four yards of the department located in various places such as Ingurukade and Orugodawatta.
The prevailing154 year’s old Customs legislation based on the 1869 Customs Ordinance will be replaced by introducing a new law as the existing law is now complex and archaic, that has not been kept up with the developments of modern global trends.
The Finance Ministry has been directed to streamline services of the Customs management and staff while improving productivity and modernisation of standard operating procedures.
Customs department has been tainted with alleged fraudulent transactions in import and export trade as well as private bonded warehouse dealings by businessmen and their tactics of using over- and under-invoicing of import and export goods in connivance with Custom officers.
The department is grappling to achieve the current tax collection target of Rs. 750 billion set by the Finance Ministry after revising it twice earlier to Rs. 970 billion from Rs.1.25 trillion initially and change it to Rs. 750 billion from Rs. 970 billion.
The Ministry has made these revenue target revisions considering the difficulty faced by the department to achieve it amidst import restrictions which has resulted in considerable import tax revenue loss, State Finance Minister Ranjith Siyambalapitiya disclosed.
He noted that custom officers have to double their efforts in revenue collection to achieve the new target as the department has been able to collect Rs. 450 billion during the first eight months of this year.
The tax default has become a frequent occurrence with amount of default taxes of Sri Lanka Customs recorded a new high of Rs. 6.71 billion as at June 30, 2023, Ministry data shows.