The Pre-War Years (1910s - 1940s)
Established on 1 Jan 1910 under the name Government Monopolies Department, Customs was one of the oldest tax-collecting organisations in Singapore. The Department's history dates back to the Straits Settlement period. The administration of customs, was developed in Great Britain and other European nations in the 19th Century.
The first customs tariff (on hard liquors) came into effect on Dec 1909. In 1916, the tariff was imposed on tobacco, which by definition includes items such as cigarettes, cigars etc. The reason for imposing import duties under the Tobacco Duties Ordinance, No. 14 of 1916 was to raise additional revenue for the war then being waged in Europe. With the amended Ordinance passed in 1926, the imposition of duties on tobacco continued to be in force for an indefinite period. The collection of duty on petroleum was then subsequently introduced in 1934.
From the very beginning of the Colony, revenue was derived foremost from opium and spirits. Opium provided the Colonial Government with a steady income right up to the outbreak of the Second World War. The Opium Commission set up in 1907 later ruled that the prohibition of opium trade/farming was unnecessary as it would only reduce the revenue stream. Opium had become a government monopoly. The authorised sale of chandu by retail took place solely in prescribed government shops. This practice which had the desired effect of confining consumption to specified premises, also encouraged smuggling. In 1924, a total of 11.5 tons of smuggled opium were captured in the Straits Settlement. The smuggling of raw opium went on unabated up till the end of 1941 and saw a revival from 1946 - 1955. After that decade, the decline was evident. The traditional stream of revenue from opium, liquors, tobacco and petroleum kept flowing in till the end of the Second World War.
In Apr 1935, the name "Government Monopolies Department" was replaced by the "Excise Department". The change reflected the decreasing emphasis on revenue derived from the chandu monopoly and the increasing reliance of the government on its revenue from the duties imposed on tobacco, petroleum and intoxicating liquors. The emphasis of excise concept confirmed the importance of locally manufactured liquors as a source of revenue. The name of the Excise Department was later changed to that of Department of Customs and Excise in 1938 and the designation of its head was amended to be read as "Controller of Customs". It was later renamed as the 'Controller of Customs & Excise' in 1966 with the addition of the phrase "and excise" reflecting the importance of expanding its excise base. In 1938, the Department took over complete control of the Opium Factory.
War Years And Aftermath (1940s)
In 1940, certain War duties were imposed on articles previously not taxed and a temporary entertainment duty was introduced to bolster funds for the war effort. Both came under the purview of the Department. Additional War duties (on rubber) and income tax were further imposed in 1941. The Pacific War broke out on 8 Dec 1941, and with the rapid advances of the enemy troops right up to the causeway, huge stocks of liquors were voluntarily destroyed in Singapore. When the Japanese occupied Singapore in Feb 1942, the Japanese took advantage of the huge stocks of opium left behind by the British as a source of immediate revenue. They carried on sales in the Government Retail Shops. During the period of Japanese Occupation, external trade virtually came to a standstill. The Japanese endeavoured to enforce the prewar structure of customs and excise duties but they were not entirely successful due to war- time conditions. The yield from import duties fell rapidly and increasing dependence was then placed on excise duties, local taxes, gambling licenses and currency adjustments through new issues of notes with no fiduciary basis. In Nov 1943, the British Government announced total prohibition of opium (import, export, possession, sale or purchase) would replace its policy of gradual suppression of opium in enemy occupied territories in the Far East after the War. The Opium and Chandu Proclamation, enacted on 1 Feb 1946 called on those in possession of opium, chandu, pipes, lamps or utensils to surrender them. This prohibition could not stop the craving of those pre-war registered addicts and those who had acquired the habit during the Japanese Occupation. Traffickers quickly saw a golden opportunity to make fortunes when the addicts went underground. Communications were reestablished with sources of supply and the highly profitable of the smuggling of the drug was resuscitated.
The period of Japanese Occupation was noteworthy in that local staff had a greater share of high level administration up to the Heads of Divisions. In 1945, the Department was placed in the hands of a staff officer of the British Military Administration who was then an officer of the Malayan Customs Service. On 1 Apr 1946, the post of Comptroller of Customs was held by an expatriate officer of the service, who was a member of the distinguished Malayan Civil Service. In 1949, it was announced that recruitment to the top grades of the Service would be open to persons of local domicile and expatriate officers would be recruited on a lower order of priority. This was a step towards self-government. The first local Division I officer was engaged in 1951. Malayanisation of the Department was finally completed in 1961. The Department was fortunate in having a core of experienced middle rung officers, successful candidates of the open competitive examination selected for entry into the higher services and a modest number of university graduates.
Post War Revenue Protection (1950s - 1970s)
The Customs procedure of stamping the legend "Singapore Customs Duty Not Paid" or "SDNP" on duty free exports of cigarettes and intoxicating liquors dated back to 1952, when it became apparent that more and more of these goods after export, were finding their way back to the Singapore markets. The favoured landing places were along the coasts of Tanjong Balai, Pasir Panjang, Kallang River, Siglap and Tanah Merah Besar. The bulk of seized contraband was traced to the duty free stocks originally consigned from the Singapore bonds and licensed premises to the nearby tariff free Riau archipelago area. A restriction by quota of approved brands of cigarettes for sale to the Riau islands was also introduced as a counter measure. This measure aided prosecution cases in court against offenders in possession of the contraband but also reduced the scope of smuggling. A limitation on exports of dutiable tobacco, emergence of high-powered customs speedboats and stricter quota implementation won the battle against smuggling. The battle for supremacy in speed and manoeuvre on land (car pursuits) and in the high seas continued with twin and triple outboard engined hulls challenging customs forces. Ramming of preventive vessels by smugglers' craft and vice versa was not uncommon.
For reasons of weight and bulkiness, smaller profit margins then obtainable, and greater difficulties in disposal, liquor smuggling lost some ground to the traffic in cigarettes. Petty smuggling by fishing and other small craft from Riau Island and by crews of passengers and cargo ships accounted for a large proportion of liquors seized. Owing to the low duty, there were practically no seizures of beer and stout. From 1960s onwards, there was a reversion to using rowed sampans or kolehs instead of speedboats to smuggle the dutiable goods. Illegal landing of duty free tobacco and liquors by certain bum-boat men, working in collusion with ships' stewards or chinchews and crew members, became quite prevalent, the situation being aggravated by certain ship-chandlers supplying excessive quantities of these sea stores under false declarations. Rules were later enacted to prescribe definite places for uplifting and landing dutiable goods under customs supervision. Exporters were also required to furnish bank guarantee and a tight surveillance was made over the export craft. This put some order to the situation and aided preventive action.
Revenue evasion of petroleum products has been minimal. It usually takes the form of wrongful accounting of these products, occasional improper use of duty-exempted products and abuse of duty-free blue coloured military petrol, particularly before the British rundown of its forces. Checks of stocks at installations and depots are important tasks to ensure that products used in Singapore are duty paid. By 1971, the Department has built up adequate expertise and specialised units to counter the fraud cases involving dual invoices, omission of dutiable elements etc.
Post War Drugs Prevention (1950s - 1970s)
The responsibility for enforcement of Singapore's anti-narcotics law after the war rested jointly with the Police Force and the Department. Between 1946 - 1952, the brunt of suppression of drugs was borne by the Department. It was not until July 1952 that a Narcotics Branch of the Criminal Investigation Department (CID) was formed and the Police took over the task of suppressing internal trafficking and consumption. Customs concentrated on the prevention and detection of entry of drugs by land, sea, air and systematic major investigations into activities of local syndicates involved in international and national trafficking. A Central Narcotics Intelligence Bureau (CNIB) was set up within the Department in 1954 for the coordination of preventive action against illicit narcotics traffic, for the maintenance of drug records and for liaison with similar enforcement agencies overseas.
From Feb 1962 - Apr 1965, Divisional Police carried on the task of drug suppression with active support from Customs. The Narcotics Branch was re-opened in Apr 1965. In Nov 1971, the Narcotics Branch officers were absorbed into the newly formed Central Narcotics Bureau (CNB), an independent department under the wing of the Ministry of Home Affairs. Personnel from Customs Department were seconded to the new Bureau. The CNIB ceased to prepare the quarterly drugs bulletin in cooperation with Malaysian Customs and was renamed the Customs Intelligence Bureau (CIB). During the decade of the 50s, the bulk of the illicit raw opium supply came by sea and the Customs Harbour Division scored resounding successes. Its Big Ships' Party was well known as the best ships search party in the East. On land, the task is left to Land Division with its HQ at the Woodlands border station.
The Customs Special Investigations Division has a small but experienced staff whose duties include the task of uncovering the activities of leading narcotics traffickers and pushers. This Division made several huge hauls prior to 1971. Every drug offence involves smuggling at some stage since the production or manufacture of all narcotics drugs on which addicts are dependent almost entirely takes place outside Singapore. Opium was the principal drug of trafficking and addiction but its impact is slowly but surely losing strength. The trafficking gathering momentum during the post war era. Before the Second World War, the bulk of opium smuggled into the Colony was discovered on board ships from China and other ports. The source of opium however changed from east to west with more consignments coming in from Persia, India and Burma. Bulk smuggling of raw opium by oil tankers from the ports of the Persian Gulf and by ocean going cargo ships from the Indian Sub continent ceased by about 1957. The opium was either dropped over board on approaching Singapore waters and kept buoyed up by rubber floats or it was concealed in ships' tanks. The Year 1955 saw a recrudescence of steamers and small-engined crafts from Thailand and other ports bring in large quantities of raw opium packed in airtight tins and hidden in fuel tanks.
In 1957, there were initial attempts to bring in bulk opium by fishing vessels with outboard motor speedboats utilised for the actual landing. The modus operandi in brief was thus: Singapore-based fishing vessels rendezvous with opium carrying fishing vessels from Thailand and other northern ports either at one of the many small coastal villages along the East coast of Malay Peninsula or at the fishing grounds of the South China Sea and take over the cargo of opium, usually 500 - 1000 kg. The Singapore vessels then return and land their crates containing opium on top of which rested layers of fish which had been bought and not caught. The pattern of smuggling changed. Opium from Thailand and the mountainous border region to the north (Golden Triangle) was sent south by road. The drug was smuggled into West Malaysia either over the northern land frontier or landed on the eastern sea coast and then moved along the north-south trunk roads in motor cars, vans and lorries. It was concealed in bonnets, headlamp wells, seats, backrests, door panels etc. Owing to the intensified Customs examination of vehicles towards the end of 1966 at both ends of the causeway, the traffic was stemmed. CNB, formed in Nov 1971, took over all the executive functions relating to narcotics. However, enforcement at entry points continues to be the responsibility of Customs which works closely with the Bureau.