Chairman of the Committee on Public Finance (COPF) and Member of Parliament Dr. Harsha de Silva has proposed two solutions to address the purported decision by AliExpress and Temu platforms to suspend several of its budget shipping options to Sri Lanka following the implementation of revised customs tax regulations.

Speaking in Parliament today (08), MP de Silva said although the matter has been discussed extensively, the government has failed to provide any solution to address it which has left several customers in a limbo.

Accordingly, the Parliamentarian stated authorities must either consider not charging import duties on small imports (usually less than US$ 50) or impose a nominal duty on products that exceeds the agreed threshold.

He said the practice of ‘de minimis’ where duty is exempt on small parcels is in place in several countries across the world.

The CoPF Chairman said therefore the authorities must first determine whether the transactions taking place through e-commerce websites fall under the Business-to-Business (B2B) or Business-to-Consume (B2C) category and then set a threshold.

Authorities can impose an import levy at the rate of 5 -15%, if need arises, the Parliamentarian said.

He stressed that implementing line by line HS Code levy will require officials to obtain the Taxpayer Identification Number (TIN) of each customer.

Therefore, MP de Silva noted that imposing tax on individual items based on HS codes is not practical as such a methodology will lead to the collapse of the entire system.

Dr. Harsha de Silva is of the view that, by simplifying the tax imposing methodology and differentiating the purpose of transition, the current impasses related to budget shipping in Sri Lanka can be resolved.