A recent audit report has revealed significant financial losses to the state due to vehicles remaining under Sri Lanka Customs custody for prolonged periods, while separate investigations have uncovered substantial tax revenue losses linked to the alleged under-valuation of imported vehicles.
According to the 2025 Customs Annual Performance Report, a large number of vehicles held by Customs for more than eight years have deteriorated severely and are now reportedly unfit for use.
The audit found 329 vehicles stored on private property in Mattakkuliya and another 108 vehicles kept at the Ruhunupura Port premises. The vehicles had been exposed to the elements for years, resulting in extensive deterioration and, in many cases, rendering them completely unroadworthy.
The report noted that the condition of the vehicles has significantly reduced their potential auction value, preventing the government from recovering a reasonable amount from the assets. Auditors attributed the situation to the failure of authorities to take timely action in accordance with Section 109 of the Customs Ordinance.
Meanwhile, the audit also uncovered substantial losses in tax revenue allegedly caused by the under-invoicing of imported vehicles.
An investigation into five imported vehicles found that the invoice values submitted to Customs were AUD 97,510 lower than the actual Cost, Insurance and Freight (CIF) values recorded in the relevant export customs declarations.
According to the audit, the undervaluation resulted in approximately Rs. 16.2 million being excluded from the taxable base, causing an estimated Rs. 26.7 million loss in government tax revenue.
The report also examined four vehicle models that were among the most frequently imported from Japanese auctions during 2025. Auditors compared the values declared to Sri Lanka Customs with the actual auction selling prices recorded in Japan during the same period.
The comparison found significant discrepancies between the declared values and the actual auction prices. A sample examination of 29 vehicles revealed that the alleged under-invoicing resulted in an estimated Rs. 88.76 million in lost tax revenue during the customs clearance process.
