Sri Lanka Customs vies Rs. 2.15 t revenue for 2025

• Director-General Sarath Nonis calls target an ‘attainable reality’
• Highlights 2024 saw nearly 60% revenue surge amidst record-breaking collection of Rs. 1.53 b, up from Rs. 975 b in 2023
• Asserts importance of structured, results-driven approach for revenue-generating institutions like Customs 
• Stresses proper tax collection and classification of goods over mere tax hikes for revenue growth 
• Says restructuring based on merit over seniority has improved efficiency 
• Discloses daily inaction of Customs costs Govt. Rs. 3 b, with daily revenue at present exceeding Rs. 5 b

By Charumini de Silva 

The Sri Lanka Customs Department is aiming for an unprecedented revenue target of Rs. 2,150 billion for 2025, calling it an ‘attainable reality.’

“It is a massive target, but I am optimistic that 2025 will mark another record-breaking year for the Department,” Sri Lanka Customs Director-General Sarath Nonis told the Daily FT.

With the highest revenue goal in the Department’s history, this ambitious target follows a near 60% revenue surge in 2024 with a record-breaking collection of Rs. 1,535 billion, up from Rs. 975 billion in 2023.

The Director-General opined that this independence, combined with new technical processes and advanced operational methods introduced over the past three years, has significantly improved efficiency and accountability.

“Our actual revenue for 2024 was Rs. 1535.8 billion according to the Treasury. It means we achieved the original target of Rs. 1533.2 billion. Earlier, it was reported as Rs. 1531 billion and later, the Treasury corrected it,” he added.

Despite initial scepticism within the Department, Nonis asserted that while some argue Government Departments do not require strategic planning, the success of revenue-generating institutions like the Customs proves the necessity of a structured, results-driven approach. 

Addressing misconceptions about revenue growth, the Director-General dismissed claims that the increase was merely due to higher VAT and tax rates. 

“Beyond tax collection, the Customs’ enforcement efforts have also intensified. In 2024 alone, 408 investigations into Customs offences have resulted in Rs. 8.5 billion in fines. This follows 224 investigations in 2023, which generated Rs. 4.1 billion in penalties. A stark contrast to the 2018-2022 period – where an average of 190 cases per year led to Rs. 2.2 billion in fines – this marks a 100% increase in investigations and a 290% increase in rewards paid to officers,” he said, adding that the payment processing time for these rewards has been cut from three years to just one to three months – creating stronger incentives for Customs officers to pursue offences. 

He pointed out that previous tax hikes did not yield proportionate revenue increases, underscoring the importance of proper tax collection and classification of goods. Ensuring accurate import valuations and duty classifications is a key responsibility of Custom officers and their efficiency in this process directly impacts State income levels. 

“A major restructuring of Customs personnel has also played a role in achieving these milestones. Instead of relying on seniority-based promotions, a ‘right person, at the right time and at the right place’ approach based on competence rather than tenure has enhanced Department efficiency,” Nonis said.

Additionally, following International Monetary Fund (IMF) recommendations, he said the Internal Affairs Unit has expedited disciplinary actions against officials accused of misconduct, leading to multiple suspensions. 

He also asserted the role of technological advancements in boosting performance, particularly through the implementation of the Automated Risk Management Unit, which minimises human intervention and enhances operational efficiency.

Noting that a permanent task force has been established to investigate allegations, Nonis urged the public to report any wrongdoing by Customs officials to this unit. 

Highlighting the importance of integrity and transparency, he stated that a strong code of conduct is central to organisational development and strategic planning within Sri Lanka Customs. “People often blame Customs for corruption, but over the past two years, we have taken decisive actions to prevent corruption,” he stressed.

The Director-General noted that while the Customs Ordinance grants him full authority to manage operations, he had to make risky, but necessary decisions to maintain revenue flow, especially during trade union actions in the past year. 

“A single day of Customs inactivity could cost the Government Rs. 3 billion, with daily revenue now exceeding Rs. 5 billion,” he added. 

On the directive of the Treasury Secretary, Customs operations were prioritised to ensure uninterrupted revenue collection, a move that Nonis believes was essential for achieving financial goals.