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COPA questions lion’s share of fines going to Customs

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Irregularities, lapses, corruption erode public finance

By Shamindra Ferdinando

 The Committee on Public Accounts (COPA) has summoned the Inland Revenue Department tomorrow (23) for an inquiry regarding the inordinate delay in collecting taxes amounting to billions of rupees and extraordinary payments made to the officers of the Customs Department out of fines imposed on both public and private sector enterprises.

Besides, a COPA sub-committee is inquiring into revenue losses suffered over the years as a result of releasing vehicles imported for special purposes as dual-purpose vehicles. 

SLPP MP Prof. Tissa Vitharana heads the all-party watchdog committee. 

Secretary General of Parliament Dhammika Dasanayake in a statement issued on April 19 through the Communication Department of the Parliament said that Committee on Public Enterprises (COPE) and COPA summoned four enterprises. COPE called the Sri Lanka Football Federation and the National Film Corporation on April 22 and 23, respectively. The COPA summoned the Wildlife Conservation Department and the Inland Revenue on April 21 and April 23, respectively, Dasanayake said.

COPA has fixed the meeting in the wake of disclosure of major shortcomings in the overall revenue collection process. Following COPA meeting Inland Revenue Chief H.M.C. Bandara on March 10, the watchdog committee called for accelerated measures to recover dues. The COPA pointed out that out of Rs 107 bn due to the government, only Rs 224 mn had been recovered so far, immediate measures were required to collect taxes and fines.

At the same meeting, the COPA, having questioned the correctness of a list containing tax defaulters furnished by the Inland Revenue Department, emphasized the pivotal importance of rectifying the shortcomings. The COPA also raised the practicability in recovering taxes in terms of the data provided by ‘Legacy’ and ‘RAMIS’ computer systems. 

The Inland Revenue Commissioner General lamented before COPA how inordinate delay in legal proceedings thwarted their efforts to recover taxes. The COPA assured that the Justice Ministry and the Finance Ministry would be summoned for a meeting along with the Inland Revenue Department to explore ways and means of overcoming the issue at hand.

At a subsequent COPA meeting held late March, it was revealed that in addition to their failure to recover taxes amounting to Rs 2,670 mn due from casinos, the Inland Revenue received 6,878 dishonored cheques to the tune of Rs 2,451,465,383. COPA members present on this occasion included Dayasiri Jayasekera, Lasantha Alagiyawanna, Dr. Sudarshani Fernandopulle, Tissa Attanayake, Mohamed Muzammil, Niroshan Perera, Dr. Upul Galapatti, Dr. Harini Amarasuriya, Cader Mastan, S. Sritharan and Weerasumana Weerasinha.

That particular meeting was also told that the amount of collectable taxes in terms of the ‘Default Taxes (Special Provisions) Act No 16 of 2010 (certified on Dec 07, 2010) amounted to a staggering Rs 144.5 bn. 

COPA and the Consultative Committee on Ports and Shipping had also taken up on March 9 and 24 the highly contentious issue of the Customs officers taking a big share of fines imposed on tax defaulters, both public and private sector. COPA pointed out that the Customs took advantage of the provision that 50 per cent of the fines imposed on defaulters were shared among those involved in a particular detection. COPA has discussed two specific issues in this regard. COPA pointed out that the allocation of 50 per cent of a fine received from the Sri Lanka Ports Authority (SLPA) for defaulting in respect of gantry cranes to Customs officers was a major problem. COPA focused on taking necessary measures in this regard after having discussed the matter with relevant authorities, including the Treasury Secretary S.R. Attygalle.

COPA pointed out how out of Rs 205 mn fine imposed on Lanka Coal Company (Pvt) Limited for defrauding taxes, Rs 102.5 mn (50 per cent of the total amount) had been distributed among Customs officers as rewards and Rs 41 mn for their welfare (20 per cent) thereby leaving the government with only Rs 61.5 mn. COPA has directed Treasury Secretary Attygalle to conduct a fresh inquiry into this and take tangible measures to prevent similar malpractices in the future.

COPA investigations have also revealed massive racket in the registration of ‘dual purpose’ vehicles. It revealed that as a result of corrupt elements since 2013 registering vehicles imported for special purposes as ‘dual purpose’ vehicles the Treasury lost taxes amounting to Rs 220 mn.

In addition to that the Treasury had been also deprived of taxes amounting to Rs 1.300 mn by not imposing Rs 3 mn each on 443 special vans brought to the country during 2010-2019 period.

COPA also stated that the Customs perpetrated another massive fraud by allowing the import of 10 vans and 414 lorries as special purpose vehicles during 2010-2014.

COPA reported the Customs imposing Rs 1.5 mn tax on a super luxury car instead of legitimate Rs 56 mn.

It revealed the loss of revenue to the tune of Rs 6.1 bn during 2013-2016 period due to the Customs adopting wrong procedure in respect of large quantities of palm oil imports by two enterprises. The watchdog committee has instructed the Customs to expedite measures to recover the dues from those companies.



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CAA reverses decision to file legal action against Litro Gas

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For introducing controversial hybrid LPG cylinder

by Suresh Perera

The Consumer Affairs Authority (CAA) has backtracked on moves to file legal action against Litro Gas Lanka for launching 18-litre premium hybrid domestic LPG cylinders in contravention of consumer laws.

The Chairman was not in favor of moving court on the matter due to political pressure, a senior CAA official said.

The move to desist from legally challenging Litro’s launch of the new hybrid cylinder to the market without the regulator’s approval comes in the backdrop of State Minister Lasantha Alagiyawanna’s intervention to allow the controversial product to be sold to consumers at its introductory price of Rs. 1,395.

“What’s the purpose of a regulatory body if politicians can interfere with CAA’s legally mandated functions to protect the interests of consumers?”, the official asked.

The selective application of the law will boil down to seeking approval from politicians on whether legal action should be instituted when even a grocery store is raided for violating regulations, he said.

“The law is the same, and if are to take punitive action by favor, then the CAA will be a dead duck bowing down to political dictates”, he opined.

Litro Gas has come under fire for introducing new hybrid domestic cylinders for Rs. 1,395 in spite of the weight being reduced by three kilograms in comparison to the regular 12.5 kilogram cylinders priced at Rs. 1,493.

“We have already received hundreds of complaints about a shortage of 12.5kg cylinders in the market as Litro is trying to push its new hybrid cylinders”, the official said.

“This is unethical”.

A resident of Kirillawala in the Gampaha district complained that only hybrid LPG cylinders were available over the past few days.

“I was told by the Litro dealer in the area that stocks of 12.5kg regular cylinders will not be received for some time”, he said.

However, Litro Gas Chairman/CEO, Anil Koswatte assured that there was no dearth of LPG in the marketplace.

When told that technically there may be no shortage of cooking gas, but on whether regular 12.5kg regular cylinders were also available apart from the new 18-litre premium hybrid product, he said that there may be delays in deliveries due to the prevailing situation, but both domestic cylinders are freely available.

Consumers can also order online or by calling 1311 for delivery, he said.

The LPG production process is continuing uninterrupted despite many challenges posed by the pandemic. Workers adhere to health safety regulations and are regularly screened and provided accommodation to prevent contact with outsiders who may be infected, he continued.

With ballooning global LPG prices, Litro Gas Lanka incurs Rs. 300 to 400 million in losses per day as the government has turned down an appeal for a Rs. 700 price increase on domestic cylinders.

The new hybrid 18-litre domestic cylinder was introduced to the market to cut losses as LPG is now sold below procurement cost.

Asked about the claim in a YouTube video shared on social media that he draws a remuneration of Rs. 3 million per month at a time Litro is facing a financial crunch, Koswatte declined to comment on what he termed as “gossip to sling mud at him”.

The presenter of the YouTube program, Chapa Bandara, claimed that Koswatte draws a monthly salary of Rs. 2 million from Litro Gas Lanka Limited and Rs. 1 million from Litro Gas Terminal Lanka Ltd.

“I am not paid with government funds”, he noted, while pointing out that both are private companies.

“My salary is a matter for the shareholders to decide on”, he stressed, while adding that his salary should not be of concern to anybody as it’s purely a private matter.

The Chairman said that if he responds to tittle-tattle, it will create the impression that he also thrives on gossip.

Presenter Bandara also asserted that a woman who served as the General Manager at the time Koswatte was Chairman of Laksala has been appointed Director (Human Resources) of Litro Gas.

 

 

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Allied Security Services to reward officer who foiled Rs. 10.7mn robbery

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Timely action by a security officer on duty at a private bank in the Anuradhapura New Town thwarted the robbery of Rs. 10.7 million by a two-member gang on Thursday morning.

The officer risked his life to prevent the gangsters from escaping with the cash during the heist, an official said.

An officer of a different security agency had alighted from the vehicle and walked towards the ATM with a representative of the bank to reload cash into the machine when two persons lurking in the vicinity had thrown chilli powder and grappled with them in an attempt to grab the bag containing the cash, he said.

They had, however, fought back, and in the melee, the bag had slipped to the ground. The security officer, who was near the entrance to the bank, had promptly run across, picked up the bag and taken it into the premises, he noted.

Sensing they had lost the chance of robbing the money, the gangsters had escaped on a motorcycle before the police arrived, the official said.

A security officer of the company entrusted with reloading cash to the bank’s ATMs was injured when his gun went off by accident during the confusion, he said. “He was admitted to the Anuradhapura General Hospital”.

The brave security officer, whose resourcefulness prevented the money from being snatched, was identified as S. R. K. Somarathne of Allied Security Services (Pvt) Limited. He is a resident of Hidogama in Anuradhapura.

“We will be rewarding this valiant officer who foiled the robbery in spite of the grave risk to his life”, a senior official of Allied Security Services, said. (SP)

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Police round up unmasked persons in public spaces in Colombo

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With the alarming spike in Covid-19 infections across the country, Police on Friday launched an operation in Colombo to round up unmasked persons in public spaces.

Police said that 85 people taken into custody were initially taken to the Bo-tree junction in Pettah, where DIG (Colombo Division) Jagath Chandrakumara, gave them a brief lecture on the risk of not adhering to health safety guidelines.

They are not only placing their lives on the line by ignoring corona preventive guidelines such as wearing a mask and maintaining physical distance, but also jeopardizing others by spreading the virus, he said.

Police said that 85 persons taken into custody were later transported in buses to the Pettah police station, where they were granted police bail. They will have to appear in court when notified.

The operation was conducted under the supervision of DIG Jagath Chandrakumara, SSP (Colombo Central) Nishantha Chandrasekara, SSP (Colombo Central 1) Samarakoon Banda, Pettah Acting OIC Chief Inspector Abeyratne and Dam Street OIC Chief Inspector A. P. Paduruarachchi on the direction of senior DIG (Western Province) Deshabandu Tennakoon.

 

 

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