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COPF: Tax concessions granted to BoI enterprise should be scrutinised

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‘There cannot be special status for anyone when across the board 30% tax is imposed on exporters’

By Shamindra Ferdinando

Committee on Public Finance (COPF) Chairman and SJB MP Dr. Harsha de Silva says unprecedented tax concessions given to HCL Technologies (HCL) that entered into an agreement with John Keels Holdings (JKH) last year should be reviewed in view of the imposition of a controversial 30 percent tax across the board on companies in the exports sector with effect from 01 Nov.Dr de Silva emphasised that reappraisal was necessary as the proposed tax would be imposed in line with the recent staff-level agreement reached with the International Monetary Fund (IMF).

Noting that the agreement hadn’t been tabled in Parliament yet, the Colombo District MP said that India-Sri Lanka joint enterprise couldn’t be granted special status in terms of the Strategic Development Project Act, No. 14 of 2008 at a time the country was in dire straits.

Dr. de Silva said on Saturday (15) that particular Act should be rescinded in view of the agreement with the IMF. The economist questioned the unchecked authority enjoyed by the Minister, assigned that particular subject, to grant concessions up to a period of 25 years.Responding to another query, Dr. de Silva said that the economy was in such bad shape the whole process of granting concessions to investors should be reevaluated.

Failure to do so could trigger public protests at an unprecedented scale. SJB leader Sajith Premadasa has repeatedly flayed the Wickremesinghe-Rajapaksa government over declaration of a range of taxes. The COPF on Oct 04 granted approval for sweeping tax concessions to the HCL-JKH enterprise, less than 24 hours after rejecting the proposal made by Chairman of the Board of Investment (BoI) Raja Edirisuriya for exemptions of VAT, Dividend tax, PAL, CESS, Income tax, customs duty, etc.

At the time of the new appointment, Edirisuriya served as the Executive Director of the Colombo Port City Development Project. One-time Chairman of bankrupt Mihin Lanka succeeded Sanjaya Mohottala, who resigned after having appointed 29 staff with salaries over Rs 700,000 a month.

Under the agreement between HCL and JKH, the former occupied 80 percent of space in the 30-storey Grade –A state-of-the–art Cinnamon Life complex. The finalization of that agreement and the inauguration of the project was attended by the then BoI Chairman Sanjaya Mohottala, JKH Chairman Krishan Balendra, Indian High Commissioner Gopal Baglay, the then Finance Minister Basil Rajapaksa, HCL Technologies Chief Financial Officer Prateek Aggarwal, and Corporate Vice President Srimathi Shivashankar.

The Island sought an explanation from Dr. de Silva why the COPF granted approval having lambasted the top management of the BoI for seeking a far-reaching tax holiday at a time the bankrupt government was taxing all, regardless of the consequences. Dr. de Silva said the parliamentary watchdog committee didn’t enjoy executive powers.

Referring to a statement issued that had been issued by Parliament on Oct 04 in this regard, Dr. de Silva said though the parliamentary watchdog committee granted approval for the relevant after receiving required information, the basis for giving such tax concessions should be properly analyzed and a appropriate policy prepared in future to determine the tax concessions depending on the size of the investment.

Minister Vidura Wickramanayaka, State Ministers Shehan Semasinghe, (Dr.) Suren Raghavan, Members of Parliament Anura Priyadharshana Yapa (Dr Harsha de Silva’s predecessor), Chandima Weerakkody, Mayantha Dissanayake, Harshana Rajakaruna and Prof Ranjith Bandara (Chairman, Committee on Public Enterprises) attended the Oct. 04 COPF meeting.HCL entered Sri Lanka in 2020 as the country was rapidly heading towards economic crisis.

The COPF earned praise from the public for the stand taken at the Oct 03 meeting where the outfit strongly opposed India-based Tech Company a slew of tax concessions spanning more than 10 years, including an exemption from the income tax for 17 years, with the final five at half the rate. Both de Silva and COPF member Dr. Suren Raghavan declared the BoI proposal was unacceptable. At one point SLFPer Raghavan said that he didn’t want his house to be attacked again. Referring to the destruction of his house during the July 1983 riots, Dr. Raghavan said that the same fate would befall him if the COPF granted such concessions. However, MP de Silva advised Dr. Raghavan not to be so dramatic.

The COPF took a strong stand after the top management of the BoI failed to answer Dr. de Silva’s query regarding the basis for such large tax concessions. The MP asked: “You are asking the COPF to grant a 12-year total tax holiday. If this was approved, what is the tax benefit that would be given to the company and the foregone tax to the Government?”

An irate de Silva said “This is embarrassing, Chairman. This is not how to run a BoI. We have given you ample time to come up with the figures. You are embarrassing the Government, coming here asking for a massive tax break for 17 years. Can you run a county like this Chairman? Even a tea boutique is run better. You should feel very very bad and be ashamed. Your conduct is not professional, this is not how to conduct official business. In my entire career, I have not faced such a hopeless situation like this.” Dr. de Silva questioned Edirisuriya over his role in the Colombo Port City development. The COPF asserted that the BoI was struggling to cope up with its duties, and responsibilities, and run in an extremely unprofessional manner.



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Advisory for Severe Lightning issued to the Western, Sabaragamuwa, Central, North-western, North-central, Southern, Uva provinces, and Mannar, Vavuniya, Ampara, Batticaloa districts

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Advisory for Severe Lightning
Issued by the Natural Hazards Early Warning Centre
Issued at 12.00 noon 21 April 2026 valid for the period until 11.30 p.m. 21 April 2026

Thundershowers accompanied with severe lightning are likely to occur in the Western, Sabaragamuwa, Central, North-western, Northcentral, Southern, Uva provinces, and in Mannar, Vavuniya, Ampara, Batticaloa districts after 1.00 p.m.

There may be temporary localized strong winds during thundershowers. General public is kindly requested to take adequate precautions to minimize damages caused by lightning activity.

ACTION REQUIRED:

The Department of Meteorology advises that people should:
 Seek shelter, preferably indoors and never under trees.
 Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.
 Avoid using wired telephones and connected electric appliances during thunderstorms.
 Avoid using open vehicles, such as bicycles, tractors and boats etc.
 Beware of fallen trees and power lines.
 For emergency assistance contact the local disaster management authorities

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Six Foreign Envoys Present Credentials to President Dissanayake

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Two High Commissioners, three Ambassadors and an Apostolic Nuncio-designate of the Holy See presented their credentials to President Anura Kumara Dissanayake at the Presidential Secretariat this morning (20).

The ceremony, held at 10.00 a.m., followed the formal order of precedence, with the envoys representing Papua New Guinea, Somalia, Luxembourg, the Holy See, Pakistan and Kuwait.

Accordingly, diplomats who presented their credentials were:

01. Vincent Sumale, High Commissioner-designate of Papua New Guinea (Based in New Delhi)

02. Abdullahi Mohammed Odowa, Ambassador-designate of Somalia (Based in New Delhi)

03. Christian Biever, Ambassador-designate of Luxembourg (Based in New Delhi)

04. Monsignor Andrzej Józwowicz, Apostolic Nuncio-designate of the Holy See

05. Major General (Retd) Nayyar Naseer, High Commissioner-designate of Pakistan

06. Saleh Mubarak Al-Sarawi, Ambassador-designate of Kuwait

Following the presentation of credentials, the President engaged in a cordial discussion with them. The Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath, and the Secretary to the President, Dr Nandika Sanath Kumanayake, were also in attendance.

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Rs 13 bn NDB fraud: Int’l forensic audit ordered

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The National Development Bank PLC (NDB), in consultation with the Central Bank, will soon appoint an international firm to conduct a comprehensive forensic audit into the Rs 13.2 billion bank fraud, currently being investigated by the Criminal Investigation Department (CID).

Controversy surrounds the failure on the part of relevant authorities to detect the massive scam that certain employees started perpetrating in mid-2024.

Declaring that day-to-day developments, relating to the NDB PLC, were under scrutiny, the Central Bank said that the NDB, in consultation with CBSL, was in the process of finalising arrangements to engage a leading international firm, with experts from overseas, to conduct a comprehensive forensic audit into the incident.

The Central Bank stated: “The scope of this audit will apart from matters directly related to the commission of this fraud, also fully address and assess any failures on compliance with regulatory requirements on control, oversight and governance during the period in which the fraudulent transactions took place. The forensic audit is expected to commence shortly, and its progress, including any interim findings as well as the final report, will be submitted directly to CBSL who will directly engage with the auditors to the extent considered necessary during the audit.

In parallel, CBSL has directed NDB to take immediate and expeditious measures to strengthen its internal controls and governance processes, with particular focus on addressing identified lapses. NDB has also been required to commission an independent third-party review to assess the adequacy and effectiveness of its policies, procedures, systems, and internal controls.

NDB continues to meet all regulatory requirements relating to capital and liquidity. CBSL remains in close and continuous engagement with the Board and management of NDB, as well as other relevant stakeholders, and stands ready to take any further measures necessary to safeguard the interests of depositors and ensure the stability of the financial system. There is no evidence of any other regulated financial institution suffering any loss arising from the incident at NDB and the public are requested not to be misled by any statements to the contrary made in various fora.”

NDB board directors include Sujeewa Mudalige – former Managing Partner of PwC / Past President of CA Sri Lanka, Hasitha Premaratne – Managing Director of Brandix Group, Shanil Fernando – founding member of Virtusa Corporation and Co-Founder of Sysco Labs, Bernard Sinniah – former Managing Director of Citibank and Kasturi Chellaraja – former Group CEO of Hemas Holdings PLC.

The external auditors of NDB Bank PLC is Ernst & Young.

Meanwhile, the Committee on Public Finance (CoPF) that recently met under the Chairmanship of Member of Parliament Dr. Harsha de Silva observed, with serious concern, that there appear to have been considerable lapses in corporate governance at the bank, deficiencies in supervision by the relevant departments of the Central Bank of Sri Lanka, and undue delays in the reporting of material information.

The Committee firmly underscored that such shortcomings are unacceptable and directed that immediate corrective measures be undertaken. It further emphasised that it will continue to closely monitor this matter and exercise stringent oversight to ensure full accountability, transparency, and the safeguarding of public confidence in the financial system.

The NDB issue was dealt with when the Governor of the Central Bank Dr. Nandalal Weerasinghe, along with members of the Governing Board, the Monetary Policy Board, and senior officials, attended the meeting as part of the Central Bank’s statutory presentation to Parliament conducted once every four months.

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