Sri Lanka 🇱🇰 is set to implement a new tariff mechanism for e-commerce (AliExpress, Temu) trade—question: how long will it take?

⭕ President has instructed the Finance Ministry to implement a tariff framework to speed up clearance and facilitate B2C e-commerce trade.

⭕ The Ministry is reportedly weighing an intermediate system between the older informal per-kg methodology and the current HS-based system—possibly a de minimis threshold plus a flat rate.

⭕ The Trade and Investment Policies (TIP) department of the Finance Ministry has been tasked with implementing this new mechanism.

⭕ Historically, TIP has been one of Sri Lanka’s most lethargic departments: hundreds of policy proposals from industry and other government ministries and departments sit unreviewed, and it has never found the right balance between facilitation and tariff barriers.

⭕ Decades-old concessionary rates on certain HS codes, as well as exorbitant rates on others, have rarely been reviewed or adjusted based on whether the intended outcomes have been achieved.

⭕ For example, shoes carry a Rs 2,000 cess duty on every imported pair—a rate unchanged for decades—yet we have not seen measurable growth in the local industry; instead, smugglers profit.

⭕ Industries such as electric appliances are lobbying for separate HS codes for items requiring SLSI approval versus those that do not, to avoid unnecessary clearances and approval delays caused by grouping all products under the same code.
- not happened yet.

⭕ The solar industry wants to lower the lithium-ion battery tax to foster growth in the battery-backed solar space.
- not happened yet.

⭕ Even government ministries find it extremely difficult to get things done by TIP. For example, the Industries Minister wants to increase the tax on cheap lighter imports to protect the failing matchbox industry, but that change has not yet occurred.

⭕ The saddest part is that TIP could be a great tool for the country—like the Central Bank—for driving significant economic progress by analyzing data and setting rates while bypassing bureaucracy, yet the department has rarely acted.

⭕ The administration wants a viable tariff mechanism for E commerce within days to weeks; however, if TIP follows its old pattern, it may take not months or years, but decades before a new e-commerce tariff framework materializes.

This would be a good KPI for the TIP (Department of Trade and Investment Policies) under this government. Let’s see how long it will take to implement a new mechanism...

#SriLanka #Ecommerce