News
Audit report exposes multibillion rupee scandal by Customs
View(s):Sri Lanka Customs officials have distributed billions of rupees as reward money among themselves since 1988, based on an internal circular prepared by the department, disregarding a scheme approved by the Minister of Finance, an audit report revealed.
Based on the information available for the audit from 2012 to August 31 last year, a staggering Rs 24.22 billion (24,225,600,376.) was paid to Customs officials. The reward money should be distributed among officials and informants in terms of a scheme approved by the Minister of Finance as per Section 153(2)(b) of the Customs Ordinance, but without such approval of the Minister, the internal department order had been prepared at its discretion, and money has been paid since 1988 based only on those orders, according to the special audit report compiled by the National Audit Office. The report titled “Special Audit on the Management/Administration of Various Funds in Sri Lanka Customs” pointed out serious mismanagement of reward funds by Customs officials, and it included non-payment of the designated share of penalty funds to the General Treasury.
Further, the report found that internal orders were prepared so that the rewards could be given to the officers who are not related as a group contributing to investigations in accordance with the act.
“Routine operational detections were also considered as detections of customs offences and the staff was given reward rights for that. Therefore, it was observed that even if the officers only report for duty, they receive salaries, incentives and overtime and if they perform the duties and responsibilities of the customs officers, then they receive additional benefits,” the report by Auditor General W.P.C. Wickramarathne said.
In terms of the Customs Ordinance, once an offence related to imports is detected, a penalty is imposed, and only 50 percent of the remaining net revenue from the penalty will be credited to the account of the Deputy Secretary of the Treasury after deducting any relevant cost against collecting that revenue. The remaining 50 percent will be shared among officers credited through the Custom Officers’ Reward Fund.
However, the report found that only sixty percent of the fifty percent designated to the Treasury Deputy Secretary’s account is credited to the Consolidated Fund, and the remaining 40 percent is credited to the Customs Management and Compensation Fund, while the same 40 percent is used for the welfare of the Customs officers.
Accordingly, only 30 percent of the reward fund of the remaining net revenue after deducting the cost incurred from the revenue collected in relation to a detected customs offence is directly credited to the Consolidated Fund. There are some occasions when the amount credited is less than the actual Customs revenue, the report said.
As of August last year, Rs. 14,535,360,226 was credited to the Consolidated Fund during the period since 2012.
The report also indicated that the total amount of penalty initially imposed only on 17 occasions from 2017 to 2023 was Rs. 7.6 billion (7,611,652,834), and the penalty value was later mitigated to Rs. 481,694,078 due to the relaxation of the investigating officer in accordance with powers vested with the Director General of Customs.
“The value of 30 percent credited to the government from the mitigated penalty value was Rs. 144,508,224, and it was observed that there was a loss of state revenue of Rs. 181,512,488 compared to the amount of tax attempted to be evaded, which was Rs. 326,020,712.”
Stressing that Customs officials earn very high levels of overtime payments in the absence of a fingerprint machine system to record their attendance, the Auditor General said the accuracy of the overtime payments could not be verified and further recommended introducing the system as required by a Public Administration Ministry circular.
The best way to say that you found the home of your dreams is by finding it on Hitad.lk. We have listings for apartments for sale or rent in Sri Lanka, no matter what locale you're looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more - we've got them all!