DSS was/is the same - I hate it, but we came up with a way of dealing with it that hasn't stopped him lying, but has stopped him lying as much to us 
When he says something that is clearly not true, we pretend to accept it at face value, but then ensure that follow it through to it's natural conclusion, with all the consequences that comes along with it.
I remember one conversation, DSS was about 8, in which he claimed that he had, in the past, "nearly broken his leg" by falling down the stairs. DP said "Oh! I don't remember that", to which DSS said that it had happened after DP had moved out. He went on to say that he had spent the night in hospital and that the Dr's had said that he "wasn't allowed" to walk far ever again because of it. We realised that this was an attempt to avoid having to walk the dogs with us in the rain, as he had earlier that day, and which he had made clear that he didn't enjoy by moaning and whining the whole way.
Rather than tell DSS that we didn't believe him, we went along with it, we said how awful for him, asked if he had any scars etc, and DP even apologised for "making" DSS walk so far earlier in the day. He told DSS that he would get in touch with the Dr's and DSS Mum, and find out exactly what DSS was and was not allowed to do, so that we didn't make DSS break the Dr's rules again. DSS then looked thoughtful and said that it "might have been a dream"
- which we agreed it might have been, as we were sure that DP would know if DSS had been in hospital overnight!
We've done this with a lot of different "lies" that DSS tells - along with the very, very clear house-rules that lying will always have bigger consequences than any other transgression. DP has followed through as well - DSS often lied about washing his hands, brushing his teeth etc; he now realises that it's a lot less hassle to just get on with it than deal with the consequences if he's caught out lying about it 
In DSS case, he is unlikely to ever change because lying works at his mums house (he gets away with it) and he sees his Mum and grandma lie to get what they want, so it's not discouraged. All we can do is reduce it's effectiveness in our own home, so that he is less likely to do it.