- 437 vehicles deteriorated beyond use, costing revenue
A large number of vehicles kept in Customs custody for as long as eight years have deteriorated to the point where most are no longer fit for use, according to the 2025 Annual Performance Report of Sri Lanka Customs.
The report states that 329 vehicles held on land obtained from a private company in Mattakkuliya and another 108 vehicles kept at the Ruhunupura Port premises had been left parked in yards for prolonged periods, causing most of them to deteriorate and become unfit for operation. As a result, Customs is now unlikely to obtain a reasonable return even by auctioning the vehicles, the report states.
The audit has attributed the situation to Customs' failure to take action in accordance with Section 109 of the Customs Ordinance. The prolonged retention of the vehicles had allowed them to deteriorate to such an extent that their value had been significantly reduced, resulting in further losses to the Government.
The report has also found that Customs had cleared five imported vehicles after invoices were submitted showing values lower than the Cost, Insurance, and Freight (CIF) values recorded in the export Customs declarations. This resulted in the total value of the five vehicles being understated by Australian $97,510.
According to the audit, when the CIF values recorded in the export Customs declarations were taken into account, approximately Rs. 16.2 million had not been included in the taxable base of the five vehicles. This had resulted in an estimated loss of Rs. 26.7 million in tax revenue to the Government.
The audit further examined the prices at which four of the vehicle models most commonly imported into Sri Lanka had been sold at auctions in Japan. It found that, when prices at Japanese auctions held around the same period as the importation of a sample of vehicles in 2025 were compared, there were indications that importers had cleared the vehicles through Customs at lower declared values.
The audit found that this had resulted in an estimated Rs. 88.76 million in tax revenue being lost to the Government in the clearance of 29 vehicles included in the sample examined.