May 17, 2018

Sri Lanka has intensified its customs checks after a rise in the number of people smuggling gold into the country in an attempt to avoid a new tax on gold imports, a Senior Official said on Thursday.

More than a dozen arrests have been made in the past four weeks after the government slapped a 15 per cent tax on imports of gold, claiming that a tax-free facility provided was being misused.

“We have been making a series of detection of smuggling of gold, mostly from Singapore and Dubai, prompting the customs to step up our checks,’’ Vipula Minuwanpitiya, deputy director of the customs department, told dpa.

Passengers have been smuggling gold in various ways into the country hidden inside bags, shoes and clothing, Minuwanpitiya said.

On Tuesday, two people attempting to smuggle gold in the shape of discs hidden in their rectums were arrested at Bandaranaike International Airport, the country’s main airport.

The two passengers, who had arrived from Singapore and India, were carrying 20 gold discs, each weighing 100 grammes.

In a separate case on Wednesday, a suspect carrying gold hidden in his shoes was arrested at the same airport.

“Our investigations have found that gold smuggled into the country is then smuggled out to India, where taxes on gold and gold jewellery are high,’’ Minuwanpitiya said.

Statistics from Sri Lanka’s Central Bank show that the country last year spent more than 600 million U.S. dollars on importing 15,843 kilogrammes of gold, but that the jewellery export trade had not developed correspondingly.

The objective of allowing tax free gold imports was to encourage jewellery production and exports.