Customs save billions for state coffers

Over 78 m contraband cigarettes seized in three years:

The Sri Lanka Customs prevented excise evasion to around Rs 2.3 billion by seizing more than 78 million smuggled cigarettes during the past three years.

International Monetary Co-operation Senior Minister and Finance and Planning Deputy Minister Dr Sarath Amunugama who inspected the seized cigarettes at the Customs warehouse in Orugodawatta yesterday said tax avoidance and evasions undermine the effectiveness of tax policies and results in less revenue for the government.

International Monetary Co-operation Senior Minister and Finance and Planning Deputy Minister Dr Sarath Amunugama inspects the seized cigarettes at the Customs warehouse in Orugodawatta yesterday. Picture by Sarath Peiris

“This in turn will deprive earnings to fund vital public services,” he said.

While appreciating the role played by Customs in curbing the illicit tobacco trade and saving billions of rupees to the government by preventing tax evasion, the minister told officials to acquire the latest technological equipment to further aid detection.

He told Customs officials to work in close coordination with international counterparts in establishing a global tracking and tracing system and information sharing mechanism to counteract and eventually eliminate the illicit trade in tobacco products.

The minister after inspecting the seized contraband, gave the greenlight to destroy the stock valued at over Rs 1.2 billion.

Minister Amunugama yesterday also inspected the latest detection, a container consisting smuggled cigarettes worth over Rs 15 million. Meanwhile, Special Tasks and Vigilance Division Superintendent of Customs Parakrama Basnayake said his organisation on the advise of Minister Amunugama will pursue all avenues to further enhance detection capabilities.

He said the illicit trade costs the government millions of rupees which could otherwise have been used for public benefit.

The tax policy is considered the most effective strategy to reduce tobacco abuse and prevalence.

Tax avoidance and tax evasion therefore undermine the effectiveness of tax policies and result in less revenue for governments, cheaper prices for smokers and increased tobacco use, he said.

The illicit cigarette trade also defeats government attempts to make the public aware of the dangers of smoking by way of health warnings on packs.

The smuggled packs come with no graphic pictures, warnings or taxes, he said.