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.
News
Our objective is to ensure that the Commission to Investigate Allegations of Bribery or Corruption operates as an independent institution, free from any external influence – PM
Prime Minister Dr. Harini Amarasuriya stated that the government’s objective is to ensure the environment for the Commission to Investigate Allegations of Bribery or Corruption [CIABOC] to function as an independent body, without influence from anyone, including Members of Parliament and Ministers.
The Prime Minister made these remarks while participating in the debate on the interim resolution concerning the determination of salaries and service conditions of the officers and employees of the Commission under the Anti-Corruption Act.
The Prime Minister stated:
“Honourable Speaker, I consider the proposal presented today on determining the remuneration and service conditions of the officers and employees of the Commission to Investigate Allegations of Bribery or Corruption to be highly important. Although the Anti-Corruption Act was passed in 2023, we only began to truly feel the presence of an active Commission from 2025.
Since then, we have had to experience a number of challenges in operationalizing the Commission. In particular, there were several obstacles, including limitations in recruiting officers, which hindered the Commission from functioning as required. It was necessary to establish several practical conditions, such as granting the Commission the freedom to determine allowances for its staff, to formulate the rules and regulations required for its operations, to recruit personnel, and to submit budget estimates relevant to its annual plans. At the time the new Director General assumed duties, there were over 4,000 investigation files within the Commission where investigations had been completed but cases had not yet been filed. Moreover, there were only about 31 legal officers.
Follow the adoption of this proposal, the Commission will be granted the authority to recruit officers, determine necessary allowances, and make independent decisions regarding financial matters. This will enable the Commission to effectively fulfill its intended mandate. This proposal plays a significant role in building a new political culture in our country, one that is anti-corruption and committed to a transparent public service that is free from bribery”.
Further commenting, the Prime Minister also addressed the country’s response to the ongoing global energy crisis.
“In the current global context, our economy and energy sector are facing multiple challenges. These conditions are constantly evolving and difficult to predict. However, it is our responsibility as a government to recognize these changes and manage their impact on our economy.
Following that, the Cabinet has decided to appoint four special committees. Accordingly, one committee will focus on ensuring the uninterrupted provision of essential services to the public; while another will make decisions on maintaining public services through energy management within the public sector; a third will work with the Procurement Commission to identify new methods of energy procurement in addition to existing mechanisms; and a fourth will examine the social impacts arising from this situation, including its effects on vulnerable groups, and recommend fair solutions, relief measures, and welfare services.
This is a situation that we, as a country, must face collectively. The public service, the private sector, the political leadership regardless of party differences and the people of our country must come together to overcome this, just as we have faced previous challenges. We are confident that, we will be able to successfully face this situation through proper leadership and management, and by making timely decisions.
[Prime Minister’s Media Division]
Latest News
Heat Index at ‘Caution Level’ in the Western, Sabaragamuwa, North-central, Southern and North-western provinces and in Monaragala, Mannar, Vavuniya and Mullaitivu districts
Warm Weather Advisory Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 3.30 p.m. on 18 March 2026, valid for 19 March 2026
The general public are cautioned that the Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, North-central, Southern and North-western provinces and in Monaragala, Mannar, Vavuniya and Mullaitivu districts.
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.
News
Pay hike demand: CEB workers climb down from 40 % to 15–20%
A salary increase in the range of 15 to 20 percent is currently under discussion within the Ceylon Electricity Board (CEB), though no official decision has yet been taken, The Island reliably learns.
A senior electrical engineer who is is privy to ongoing salary negotiations, speaking on condition of anonymity, said the proposal had been put forward as a reasonable and necessary measure, rather than a rigid demand, in light of the prolonged delay in salary revisions. Earlier they have been asking for a staggering 40% salary increase.
“We are not insisting on this as a primary demand or condition. What we are requesting is for the authorities to seriously consider the possibility of granting an increase,” he said.
He emphasised that CEB employees had not received any salary increment since 2024 due to the ongoing reform and restructuring process, leaving staff to cope with rising living costs without adjustment.
“Under normal circumstances, the next salary revision would only be due in January 2027. That creates a significant and unfair gap. This proposal is, therefore, a justified attempt to secure at least a reasonable percentage in the interim,” he said.
The engineer warned that continued inaction could have serious implications for staff morale and operational efficiency at a time when the power sector is undergoing critical reforms.
Sources said that while internal discussions have pointed towards a 15 to 20 percent increase, the matter has not yet been formally taken up at policy level.
However, pressure is mounting on authorities to reach a timely and equitable decision, as frustration grows among employees over the absence of salary adjustments for nearly three years.
By Ifham Nizam
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