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COPA: Excise Dept. fails to collect Rs. 2.37 bn

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By Saman Indrajith

A probe by the Committee on Public Accounts (COPA) has revealed that the Excise Department failed to collect Rs. 2.37 billion as tax revenue last year.

The probe conducted by the COPA under the chairmanship of Prof Tissa Vitarana, on Monday, found the total amount of tax arrears due to the Excise Department for more than five years was Rs. 479.9 million as at December 31, 2019 and its delay charge alone amounted to Rs. 1.89 billion making the total outstanding amount Rs. 2.3762 billion .

COPA Chairman Prof. Vitarana ordered that prompt action be taken to recover the arrears.

The Commissioner General of Excise and other officials informed the Committee that legal action had been taken to recover the arrears.

The Committee noted that the Excise Department had conducted 224,737 raids during the last five years, and of them 53,848 were carried out in 2017, 49,278 raids in 2018 and 47,391 raids in 2019.

COPA Chairman Prof. Vitarana highlighted the fact that disciplinary inquiries against 48 Excise officers, suspended for various reasons as at Dec 31, 2019 had not been completed. He pointed that one to three years had elapsed since the suspension of those officers. It was revealed that some of the officers had been suspended for not attending the District Coordinating Committee meetings.

Prof. Vitarana instructed to complete legal proceedings expeditiously. The Chairman emphasised that immediate steps should be taken to fill the vacancies of senior and middle management posts, following proper procedure.

The Committee also noted that the security sticker management process with a procurement cost of Rs. 1,597,559 by November 2020 was limited to imported foreign liquor, which accounted for only 0.28% of the total revenue of the Excise Department. The Committee stressed that it was an essential programme to standardise the local produced liquor as well.

The probe was conducted by COPA chaired by Prof. Vitarana and State Ministers Dayasiri Jayasekara, Lasantha Alagiyawanna, Shehan Semasinghe, and Members Tissa Attanayake, Dr. Upul Galappaththi, Prof. Ranjith Bandara and Secretary to the Treasury and Ministry of Finance S.R. Attygalle. Commissioner General of Excise A. Bodaragama and other senior officials of the Excise Department were also present.

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MCC inconsistent with Constitution

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AG agrees with Prof. Gunaruwan report

By Shamindra Ferdinando

Attorney General Dappula de Livera, PC, has informed President Gotabaya Rajapaksa that the Millennium Challenge Corporation (MCC) Compact, Project Implementation Agreement, as well as Articles of Association of MCA (Millennium Challenge Act), Sri Lanka, are violative of cerain provisions of the Constitution.

The AG has said so in a 20-page report sent to Dr. P.B. Jayasundera, Secretary to the President.

The President’s Office on Sept. 3, 2020, sought the AG’s opinion on the MCC Compact and related matters in the wake of the Cabinet-appointed Prof. Gunaruwan Committee strongly advising against going ahead with the US initiative. The US sought Sri Lanka’s consent for the Acquisition and Cross Servicing Agreement (ACSA), Status of Forces Agreement (SOFA) and MCC. The previous government finalised ACSA in early August 2017.

Dr. Jayasundera made available the Gunaruwan report to the AG.

The outgoing US administration in Dec 2020 announced Sri Lanka had been left out of the MCC project.

AG’s Coordinating Officer State Counsel Nishara Jayaratne confirmed the MCC et al were inconsistent with the Constitution and other laws.

The Island,

 however, learns that the AG’s Department on two previous occasions, in letters dated Oct 10, 2018 and June 10, 2019, addressed to Jonathan G. Nash, Chief Operating Officer, MCC, and Director General, External Resources Department, respectively, asserted that the Compact and the Programme Implementation Agreement (PIA) were in line with the Sri Lankan law.

The first letter was sent during Jayantha Jayasuriya’s tenure as the AG and the second under incumbent AG without his approval, sources said. Dappula de Livera succeeded Jayasuriya in April 2019 about a week after the April 21 Easter Sunday carnage. Jayasuriya is the incumbent Chief Justice.

Prof. Gunaruwan’s Committee soon after the last presidential election in Nov 2019 failed to obtain the AG’s Department opinion in spite of making representations through the Prime Minister’s Office.

In the run-up to 2019 parliamentary election, then Finance Minister Mangala Samaraweera said the Attorney General had approved the US project though the Sri Lanka Podujana Peramuna (SLPP) called it a sell-out.

The following is the text of the letter dated Oct 10, 2018 captioned ‘Legal Status of Proposed MCC Compact signed by Sanjay Rajaratnam, PC, Senior Additional Solicitor General, addressed to Jonathan G. Nash, Chief Operating Officer, MCC:

“I refer to your communication dated 27th September, 2018 in respect of the above captioned matter. In this regard, I am made to understand that the delegation from the Government of Sri Lanka was able to have fruitful discussion with the Millennium Challenge Corporation Team in resolving some of the outstanding issues.

“Having gleaned through the proposed Millennium Challenge Compact, the draft Program Implementation Agreement (PIA) as well as the Points of Discussion (without prejudice) between the negotiating parties which has been made available to me, I wish to at the very outset opine that no existing laws of Sri Lanka inhibit the Compact and the PIA being implemented in Sri Lanka. If I may elucidate further, the covenants of the Compact and the PIA do not infringe any existing domestic law or any previous undertakings given by the Government of Sri Lanka. It is acknowledged that the Compact imposes legal obligations on both parties to the Agreement

“Further, consequent to the negotiations and discussions had between parties, it is proposed that the Government of Sri Lanka would seek the passage of a law in Parliament to establish the MCA- Sri Lanka as a non-profit Company limited by guarantee under the Companies Act No.07 of 2007 to implement the provisions of the Compact. It is envisaged that the proposed enactment would encompass the Compact and the PIA as Annexures, which would form an integral part of this enactment.

“Thus, I am of the view that the passage of the said enactment by Parliament would result in the Compact and the PIA, having the parity of status of a domestic law in Sri Lanka.

“In the Context of the above, it is requisite that Section 7.1 of Article 7 of the Compact referring to the provisions on Entry Into Force, would be revised with the deletion of the sentence pertaining to the Compact prevailing over the domestic laws of Sri Lanka.

“However, in order to assuage any concerns with regard to the implementation of the Compact, by an unlikely event of a legislation in the future which may impinge or infringe the said compact, upon notification by the Ministry of Finance and Mass Media (the relevant Ministry) of this fact, a legal opinion would be tendered that the proposed legislation if proceeded with would violate the covenants of the Compact. This would enable the relevant Ministry to forward its observations to the Cabinet of Ministers and Parliament, that the Attorney-General has opined that the proposed Bill if enacted would violate the Compact.

“In the circumstances, I believe that the aforementioned matters would confirm the legal status of the Compact and its entry into force.”

“Copies were sent to Ms. Caroline Nguyen, Managing Director- Europe, Asia Pacific and Latin America Millennium Challenge Corporation and J. Charitha Ratwatte, Head of Policy Development and Chief of Party MCC- Sri Lanka Project.”

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Environmentalist accuses Govt. of resorting to trickery to hand over 800,000 acres to pvt. companies

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By Rathindra Kuruwita

President Gotabaya Rajapaksa’s ‘Gama Samaga Pilisandara’ is a psychological operation to counter people’s resistance to a move to hand over chena and grasslands to large companies, environmentalist Sajeewa Chamikara said yesterday.

Chamikara claimed that the government had earmarked 800,000 acres of land to be given to corporations, and those lands would mainly consist of forests and areas used for chena cultivations and to feed cattle by small scale farmers.

“The Gama Samaga Pilisandara is an attempt to misguide the people by giving them false promises. The government tells people they could cultivate lands belonging to the Forest Conservation Department and instructs officials not to punish people who send cattle into forests. People walk away feeling good but a few months later they will find that these same lands handed over to big companies.”

They had conducted a survey on the lands that had been given to corporations by the government during 2020 Most of those lands in fact were those used by cattle herders and chena cultivators, he said.

For example 70,000 acres in Demaliya and Wandama were being given to a company engaged in sugarcane cultivation, and almost all those lands were those used by small scale farmers and cattle herders, Chamikara said. Among the lands that were given were those earmarked for those displaced by the Uma Oya project. The previous administrations tried to provide irrigation water to those lands through the Handapanagala scheme.

Chamikara said: “Another 62,000 acres have been earmarked in Moneragala, Ampara and Badulla districts for sugarcane cultivation. 80% of these lands are chena cultivations. In Rambaken Oya 5,426 acres have been earmarked for 15 companies to carry out various agro projects and most of these lands are now used by small scale cattle herders. Recently, the Department of Agriculture wrote to the Forest Conservation Department requesting that 80,000 acres in Moneragala, Anuradhapura and Badulla districts be released. These lands are to be used for corn cultivation. The Forest Conservation Department then asked the Department of Agriculture to identify the lands and we know that these lands for the most part are those used by small scale cattle herders and chena cultivators.”

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Contempt of Court case against GMOA President re-fixed for hearing on March 03 and 10

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By Chitra Weerarathne

The Court of Appeal yesterday re-fixed for hearing on March 3 and March 10, the Contempt of Court application against the President of the Government Medical Officers’ Association Dr. Anuruddha Padeniya.

Counsel Ravindranath Dabare said that his client Dr. Padeniya was under self-quarantine and was unable to attend Court.

Dr. Padeniya was summoned for Contempt of Court under Article 105/3 of the Constitution of Sri Lanka for allegedly having criticised a Superior Court ruling in respect of the admission of students to the Sri Lanka Institute of Technology and Medicine, Malabe, at a public rally on April 7, 2016, disrespecting a Supreme Court order pertaining to the enrolment of a student in the Private Medical College, which will ultimately lead to an MBBS degree.

The Court of Appeal bench comprised Justice Arjuna Obeysekera (President) and Dr. Mayadunne Corea.

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