The ongoing scandal surrounding the 2020 sugar tax scam in Sri Lanka has taken a surprising turn, with the Department of Trade and Investment Policy claiming no loss of revenue occurred. This contradicts findings from the Auditor General and raises further questions about accountability, reported Island.lk.
D. M. A. Dassanayake, Information Officer of the department, responded to an inquiry under the Right to Information Act (RTI) No 12 of 2016, stating, “Loss of revenue hadn’t taken place.” The Finance Ministry asserted that the reduction of the Special Commodity Levy (SCL) on sugar imports, as per Gazette 2197/12 on Oct. 13, 2020, from Rs 50 to 25 cents per kg, did not result in any revenue loss.
The response from the Finance Ministry, received by The Island on February 08, 2024, followed a set of questions based on the Public Finance Commission’s proceedings on Dec 16, chaired by Dr. Harsha De Silva. During the meeting, Dr. De Silva raised concerns about the failure to recover losses from the Oct 2020 sugar scam, as revealed by a forensic audit.
The Auditor General recommended a criminal investigation into the Rs 16 billion tax revenue loss during Mahinda Rajapaksa’s tenure. Despite a 99.5% reduction in SCL on sugar imports, the House committee highlighted authorities’ inaction in preventing exploitation. The IRD was instructed on January 16, 2024, to submit a report on recoveries from sugar importers.
Regarding difficulties in recovering revenue losses from the sugar tax scam, the RTI officer stated that the question was irrelevant as losses hadn’t been estimated. Investigations by the CID and CIABOC on the alleged sugar tax scam in November did not reveal fraud. The Finance Ministry dismissed questions on IMF’s stance and consultation with the Attorney General regarding corrupt practices.
