Shoe smuggling in collusion with Customs ruins local industry: Manufacturers

• Says the smugglers declare only half of their actual imports to further evade taxes

By Yohan Perera   

Five errant businessmen in Pettah who are engaged in smuggling foreign shoes into the country are out to destroy the local shoe industry, the Sri Lanka Shoes and Leather Products Manufacturers’ Association alleged yesterday.
Sri Lanka Shoes and Leather Products Association President Neville Perera told journalists that these five businessmen from Pettah are engaged in smuggling shoes with the help of a few officers at Sri Lanka Customs.

“This handful of people evade paying duty for the shoes they bring into the country. The duty charged for an imported pair of shoes is Rs 1,800, in addition to other taxes. However, they sell a pair at Rs 1,500 to Rs 2,000. How can they sell a pair of shoes at such a price? Surely they are earning a good margin by evading taxes. Another tactic they use to evade taxes is declaring only half of the consignment they import. For instance, they declare only 10,000 pairs of shoes when they import 20,000 pairs,” Mr. Perera said.

“We have identified these smugglers, but we don’t want to reveal their names at the moment,” he added.
“We will be compelled to close our factories in the near future if the government does not heed our request to intervene and resolve the issue,” he also said.

Mr. Perera mentioned that ten large-scale shoe manufacturers and 10,000 small and medium factories will have to be closed down if the issue is not rectified. “The industry, which enjoys an annual turnover of Rs 150 billion, will soon die if proper action is not taken to stop the racket. Some 300,000 people would lose their livelihoods in such circumstances,” Mr. Perera said.