The increased growth of e-commerce imports in Sri Lanka has come to focus on global platforms like Temu. The government faces significant daily revenue losses as a result of these platforms. These are stemming from complaints regarding the inadequate customs procedures.
Industry representatives have voiced strong concerns about a supposed duty evasion scheme, which reportedly costs the state between Rs. 35 and 50 million each day.
At the centre of this storm is the now-scrutinized “per kilogram clearance” system that, according to critics, enabled commercial-scale importers to misclassify goods and bypass proper tax channels. As the debate heats up, it is also critical to consider the viewpoint of the everyday Sri Lankan shopkeeper who uses Temu.
For customers in Sri Lanka, especially those who had very limited access to reasonably priced clothing, household items, and electronics, Temu has expanded their shopping options due to its affordability and broad product range. The surge of inflation in Sri Lanka, coupled with the ability to purchase clothes and electronics, has eased the burden on struggling families. Moreover, rural consumers are now able to shop online, which is less financially burdensome than travelling to a store miles away.
It is safe to say that many Sri Lankans ordering from Temu do so out of convenience. They are accessing the same international marketplace where customers from other countries order freely without any economic barriers. Reduced shipping costs coupled with affordable products and practical delivery provide genuine value. Penalising these customers or making rules that are harshly strict may drive away more residents with digital connections who are just trying to manage their finances.
However, we cannot ignore the concerns of industry insiders. The loophole that lets companies clear goods based on weight instead of value seems to have been taken advantage of by some businesses operating on a large scale. Claiming to be consumer-to-consumer transactions, these parties have exploited courier services to import vast quantities of products, particularly apparel, at absurdly low duty rates. Such behaviour has resulted in a significant loss of tax income and damaged local industries. According to certain accounts, several imported commodities arrived in Sri Lanka at a lower price than local companies’ raw material expenses, pointing to a dangerous market imbalance.
The latest initiative by the Sri Lanka Customs Department to curb these anomalies by implementing a correct declaration procedure and ending the ‘per kg’ system should be viewed in light of the fact that such a measure had become inevitable to maintain a level playing field for all. However, robust policy and public communication must underpin this enforcement to prevent procedural blockages from unduly burdening legitimate users. In the absence of a clearly defined cross-border e-commerce framework, consumers and legitimate enterprises remain in a state of uncertainty.
Sri Lanka urgently needs a balanced strategy that safeguards local companies and tax income while upholding the rights and interests of individual consumers. Streamlining consumer access while enhancing anti-fraud measures to combat the commercial exploitation of courier services should work in tandem with other reforms and greater transparency.
Criticising e-commerce platforms or their users does not identify a fundamental problem. The lack of suitable regulation and enforcement that enables market exploitation of certain parties for profit is a fundamental issue. Enforcement actions against deception and fraud are crucial, but a uniform regulatory approach that hinders genuine online shopping will jeopardise the very users these reforms aim to protect.
Sri Lanka must simultaneously create a well-balanced and digitally advanced economy and ensure effective governance. Platforms like Temu are of no real threat; they are merely tools. Whether such systems will benefit the people or damage local economies hinges entirely on how the ecosystems around these tools are regulated and whether justice is rendered to all stakeholders.
