BOI Import/Export Facilitation Shifts to Sri Lanka Customs 📈

• Sri Lanka Customs (SLC) is set to take over the import/export facilitation processes for Board of Investment (BOI) firms via a pilot project starting May 2026. • The move follows an MOU between BOI and SLC, with the 3-6 month pilot project scheduled to commence at the Katunayake Free Trade Zone (KFTZ). • Rationale: This is part of the Government’s commitment under the IMF's revenue-based fiscal consolidation framework, aiming to curb significant revenue leakage. • Leakage stems from extensive tax concessions and reported misuse of import/export facilities by BOI firms (e.g., illegal local sales). • BOI corporate tax exemptions were reported to have caused a loss of Rs. 23.94 Billion in corporate taxes to the Government in 2022. • Concerns: The change comes after the recent abolition of SVAT, causing unease among the business community. • Investors have expressed reservations, citing concerns about potential supply chain disruptions and the perceived rampant corruption/control focus within Customs. • While SLC has launched initiatives like the Authorised Economic Operator (AEO) Program to enhance facilitation, business confidence remains a factor.