News
Sugar tax scam takes shocking turn: Parliament directive to recover Rs 16 bn disregarded
FM now claims loss of revenue not reported, contradicts AG’s findings
By Shamindra Ferdinando
The ongoing controversy over the failure on the part of the Finance Ministry and the Inland Revenue Department (IRD) to recover taxes from companies implicated in a massive sugar tax scam in 2020 has taken a shocking turn, with the Department of Trade and Investment Policy declaring that loss of revenue hadn’t taken place.
D. M. A. Dassanayake, Information Officer of the department that comes under the purview of the Finance, Economic Stabilisation and National Policies Ministry, said so in response to a query submitted to the Ministry in terms of the Right to Information Act (RTI) No 12 of 2016.
The Finance Ministry emphasised that contrary to claims, the issuance of Gazette 2197/12, dated Oct. 13,2020 whereby Special Commodity Levy (SCL) on sugar imports had been reduced to 25 cents from Rs 50 (per kg) didn’t cause any loss of revenue.
The Island received the Finance Ministry response on February 08, 2024 for a set of questions submitted on Dec 18, 2023. The questions were based on the proceedings of the Public Finance Commission on Dec 16 chaired by Dr. Harsha De Silva, economist and member of the main Opposition Samagi Jana Balawegaya (SJB)
During the Dec 16 proceedings, Dr. De Silva questioned the failure on the part of the Finance Ministry and the IRD to recover the losses as ascertained by the Auditor General by way of a forensic audit conducted into the Oct 2020 sugar scam. The House committee flayed the two institutions for turning a blind eye to several major sugar importers making a killing at the expense of the consumers. The Auditor General has named those who benefited from the SCL reduction.
MPs Chandima Weerakkody, Madura Vithanage, Duminda Dissanayake and Sumith Udukumbura attended the meeting.
Declaring that the government lost tax revenue, amounting to over Rs 16 bn, the AG had recommended criminal investigation into the sugar scam perpetrated during Mahinda Rajapaksa’s tenure as the Finance Minister. At the time of the issuance of the controversial Gazette in Oct 2020, S.R. Attygalle served as the Secretary to the Ministry of Finance. The forensic audit revealed that the government suffered a loss of Rs. 16.763 bn within four months (Oct 14, 2020 to Feb 08, 2021).
The House committee has pointed out that in spite of the SCL on sugar imports being reduced by a staggering 99.5%, the relevant authorities hadn’t done anything to prevent importers from exploiting the consumers. The IRD has been asked on January 16, 2024 to submit a report in respect of recoveries to be made from sugar importers.
Responding to another query, Information Officer Dassanayake said that the Finance Ministry had been summoned before the Public Finance Commission twice.Asked what were the difficulties in recovering revenue losses caused by the sugar tax scam, the RTI officer said that the question didn’t arise as losses hadn’t been estimated.
Asked whether another sugar tax scam perpetrated in November last year in the wake of the change of government consequent to Aragalaya was under investigation, the RTI officer declared that investigations conducted by the CID and the CIABOC (Commission to Investigate Allegations of Bribery or Corruption) so far didn’t reveal fraud. The Island pointed out that Labour and Foreign Employment Minister Manusha Nanayakkara is on record as having alleged a massive tax scam occurred in November last year.
The Island also asked whether President Wickremesinghe, in his capacity as the Finance Minister, instructed the Finance Ministry regarding the recouping losses. The RTI official said that the question is irrelevant as loss of revenue hadn’t been estimated or reported.
The Public Finance Commission has also paid attention to the reversal of the Special Commodity Levy in November in respect of sugar imports. The House committee questioned the rationale in the Finance Ministry seeking to collect as much as Rs 30 bn from consumers by way of tax reversal while allowing those who had been implicated in massive fraud to go unpunished.
The Finance Ministry disregarded questions submitted in terms of the RTI regarding the IMF stand in respect of the need to streamline revenue collection and whether the Ministry consulted the Attorney General as regards ways and means to address such corrupt practices.
Latest News
Landslide RED warnings issued to the Divisional Secretaries Divisions of Ududumbara, Nildadndahinna and Walapane
The landslide early warning center of the National Building Research Organisation [NBRO] has issued RED warnings to the districts of Kandy and Nuwara Eliya for the next 24 hours effective from 0900 hrs today [09th January].
Accordingly,
LEVEL III RED landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Ududumbara in the Kandy district, and Nildandahinna and Walapane in the Nuwara Eliya district.
LEVEL II AMBER landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Wilgamuwa in the Matale district, and Mathurata and Hanguranketha in the Nuwara Eliya district.
LEVEL I YELLOW landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Welimada, Kandaketiya, Badulla, Meegahakiwula, Hali_Ela, Passara and Lunugala in the Badulla district, Minipe in the Kandy district, Ambanganga Korale, Ukuwela, Rattota, Naula and Laggala_Pallegama in the Matale district, and Nuwara Eliya in the Nuwara Eliya district.
Latest News
A Policy is being formulated to ensure Child Protection in the use of Technology — Prime Minister
Prime Minister Dr. Harini Amarasuriya stated that a policy is currently being formulated to ensure child protection in the use of technology.
The Prime Minister made this statement on Thursday (08) in Kandy while briefing the Most Venerable Mahanayake Theros of the Asgiriya and Malwathu Chapters on the issue that has arisen regarding the Grade 6 English module. Thereafter, printed copies of all modules were presented to the Mahanayake Theros.
Earlier on Thursday (08), the Prime Minister visited the Malwathu Viharaya in Kandy and met the Most Venerable Thibbatuwawe Sri Siddhartha Sumangala Nayaka Thero, the Mahanayake of the Malwathu Chapter, where she explained the error that had occurred in the first print run of the English module for Grade 6 .
The Mahanayake Theros emphasized that education is a sensitive subject and that such matters should be handled with greater sensitivity and proper oversight. They further advised that a formal investigation should be conducted and that education reforms should be carried forward in a systematic manner.
Subsequently, the Prime Minister visited the Asgiriya Maha Viharaya and met the Most Venerable Warakagoda Sri Gnanarathana Mahanayaka Thero of the Asgiriya Chapter, where she clarified the error related to the English module.
The Mahanayake Thero noted that education reforms are a timely necessity and should be implemented with due oversight and careful review and also pointed out that there are broader issues in Sri Lanka regarding the use of technology, which are evident in the manner in which modern tools such as AI technologies are being used on social media.
Clarifying the issue Prime Minister Dr. Harini Amarasuriya further stated,
“We have appointed a committee to look into this issue, and based on the recommendations of the National Institute of Education (NIE), steps were taken to remove the relevant lesson. In addition, all printed copies of the relevant module have been stamped, and no module has been distributed to schoolchildren. A formal investigation into this matter has been initiated by the Ministry, and a complaint has also been lodged with the Criminal Investigation Department.
At the same time, we are in the process of formulating a policy on child protection in the use of technology”.
Thereafter, addressing the media and responding to the’ questions raised by journalists, the Prime Minister stated:
“The Opposition is attempting to use this national task for their own political advantage. However, many in society have expressed their views on the issues that have arisen in a positive manner, with the objective of identifying and correcting mistakes. The government has decided to move forward with education reforms by recognizing the error that have occurred and rectifying them. We will take the no-confidence motion brought by the Opposition as an opportunity to further advance dialogue on education reforms”
The occasion was graced by the Most Venerable Anunayaka Thero of the Asgiriya Chapter, Venerable Narampanawe Ananda Nayaka Thero; Deputy Registrar of the Asgiriya Chapter, Venerable Muruddeniye Dhammarakkhita Thero; Deputy Registrar of the Malwathu Chapter, Venerable Mahawela Rathanapala Thero; Members of Parliament Thushari Jayasinghe and Thanura Dissanayake; Mayor of Kandy Chandrasiri Wijenayake; Secretary to the Ministry of Education Nalaka Kaluwewa; and Secretary to the Ceylon Teachers’ Union in Central Province D. D. Wimalaweera.

[Prime Minister’s Media Division]
Latest News
The deep depression to the South-east of Sri Lanka is likely to intensify in to a cyclonic storm during the next 24 hours
A RED warning for a deep depression to the South-east of Sri Lanka has been issued at 01.00 a.m. on 09 January 2026 for the period until 01.00 a.m. 10 January 2026 by the Natural Hazards Early Warning Centre, of the Department of Meteorology.
The deep depression in the Bay of Bengal to the southeast of Sri Lanka (At 01:00 a.m. on Jan 9th, 2026 located about 200 km East of Pottuvil) is very likely to intensify further and move west-northwestwards towards the coast of Sri Lanka between Pottuvil and Trincomalee in the evening today (9th January 2026.) The system is likely to intensify in to a cyclonic storm
during the next 24 hours.
Hence, showery, and windy condition over the island, particularly in the Northern, North-Central, Eastern, Uva and Central provinces is expected to enhance.
-
News4 days agoInterception of SL fishing craft by Seychelles: Trawler owners demand international investigation
-
News4 days agoBroad support emerges for Faiszer’s sweeping proposals on long- delayed divorce and personal law reforms
-
Opinion14 hours agoThe minstrel monk and Rafiki, the old mandrill in The Lion King – II
-
News5 days agoPrivate airline crew member nabbed with contraband gold
-
News3 days agoPrez seeks Harsha’s help to address CC’s concerns over appointment of AG
-
Features14 hours agoThe Venezuela Model:The new ugly and dangerous world order
-
Latest News1 day agoWarning for deep depression over South-east Bay of Bengal Sea area
-
News3 days agoGovt. exploring possibility of converting EPF benefits into private sector pensions
