Lokkaaaa, TEMU or AliExpress package eka hira welada?
Here's what's really happening behind the scenes — and why your cheap gadgets are stuck in customs limbo.
Until two weeks ago, e-commerce parcels from TEMU/AliExpress/eBay were processed via "informal methods."
Agents declared items in bulk as "miscellaneous/personal goods" and paid a few hundred rupees (Rs. 350 - 800) per kg in taxes.
Low volume = low revenue risk. Everyone was happy with this workaround.
Then TEMU happened.
Aggressive marketing. Ultra-low prices. Ads everywhere. Suddenly, everyone with a smartphone started ordering. Cargo volume EXPLODED
Parliament committees noticed. The government realized massive revenue losses. Questions arose: "Where is this per-kg tax system in Sri Lanka's official tariff?"
Customs got called out. With no legal basis for the informal system, they pivoted to formal tax collection.
Result? Every single item (in 10s of 1000s) now needs individual declaration and proper tariff rates based on HS Code. Hence the delays...
E-commerce is a global issue. Every country is facing this challenge, as trade moves from traditional imports to personal-level e-commerce.
What's the global norm? There are two models:
Restrictive Model: Discourages e-commerce. Countries like
Brazil and
India impose 60%-90% taxes on cross-border e-commerce, treating them like regular imports.
Open E-commerce Model + Vendor collection: Since tax collection at customs upon arrival is not practical due to massive volumes of individual parcels, countries like
Singapore and
Australia use a Vendor Collection Model — platforms collect taxes at checkout and remit them to the destination government via local registered party.
1. Low-value goods: Below threshold (Below de minimis threshold) = no tax
2. Mid-value: Flat rate (like VAT) rate (e.g., 18%)
3. High-value: Requires separate declaration
Clean. Transparent. Scalable.
For
Sri Lanka, Model #2 is the way forward. A vendor collection system is needed. Otherwise? This customs chaos will continue indefinitely.
The root problem: Sri Lanka has NO legal framework for collecting import taxes from third-party platforms to adopt a Vendor Collection Model.
What Sri Lanka needs now is the political will to implement it. Trying to fix global issue with overnight solution like they are doing right now is doomed to fail.
Sri Lanka's current cross-border e-commerce market is around ~$500 million. It will grow exponentially in the next few years. Without proper solutions, this is going to be a major issue that will hinder
Sri Lanka’s economy.
