Government takes stern action to curb drop in customs tax revenue
The Finance Ministry has instigated investigations into malpractices and heavy losses in the Customs Department in the recent past, Finance Minister Ravi Karunanayake told the Business Times, adding that this is aimed at preventing a drop in tax revenue through the actions of certain customs officials.
“We won’t allow dishonest custom officers with connections to the previous regime to disrupt the revenue collection process,” he said adding that the ministry has uncovered tax evasion of some businessmen with high political connections running up to millions of rupees.
These tax evaders have blatantly abused customs laws with the connivance of some dishonest customs officers, he revealed.
Minister Karunanayake noted that customs officers have expedited revenue collection and the department is now earning a record revenue of Rs.5 billion a day.
He noted that former Customs chief Jagath P Wijeweera’s resignation may be due to ongoing investigations to determine the reasons for the considerable loss that had been reported in the department in the recent past. But in his resignation letter he has cited personnel reasons for his resignation from the post. The Minister said, “There were allegations against me for interfering into the official duties of Mr. Wijeweera including the granting of duty concessions for some businessmen, but there is no truth in those allegations”.
There were many cases where the tax revenue was evaded, underpaid or defrauded during the tenure of the former customs chief, he said adding that all errant officers connected to such deals would be punished soon.
Many incidents of violating customs laws including the names of the officers involved in ethanol case have been reported to the former customs chief but he has failed to take any action against them, he revealed.
Newly-appointed acting Customs Director General R. Semasinghe has been directed to take necessary action relating to these cases.
There was no connection between the release of 15 container loads of highly carcinogenic herbicide glyphosate and the resignation of Mr. Wijeweera, the Minister pointed out.
Glyphosate which should be imported under a valid permit has been banned in some districts including Anuradhapura, Polonnaruwa, Kurunegala, Monaragala and Badulla experiencing a high incidence of the chronic kidney disease, but it could be sold and distributed in other areas of Sri Lanka. These developments took place before President Maithripala Sirisena issued an order banning imports of glyphosphate.
A senior official of the Finance Ministry told the Business Times that 89 containers of areca nuts were examined and released after imposing a fine of Rs. 60 million on the exporter, Wayamba Traders, on a directive issued by the former Customs chief despite a cabinet decision to restrict such imports and re-exports.
“Another exporter was fined Rs. 32 million as it involved 48 consignments”, he revealed.
According to the April 4 cabinet decision, permits issued for such importers for the import and re-export of betel nuts under the Temporary Import for Export Purpose, or ‘TIEP’, scheme have been revoked.
The Finance Ministry is also investigating the import of spare parts for buses from Ashok Leyland Company India by allegedly altering the price of each item in the invoice for the Sri Lanka Transport Board during the tenure of former Minister Kumar Welgama.
The former minister has allegedly received a massive commission, according to documents which were in possession of the ministry and seen by the Business Times.
Minister Karunanayake said some of the investigations into corrupt practices have been hampered there were around 2600 files which went missing from the ministry soon after the change of government.
These missing files have made it difficult to investigate alleged financial misappropriation, corrupt practices, and misuse of public property and funds of top level officials during the Rajapaksa regime, he added.
He said that many allegedly corrupt deals such as Krrish, Apollo Hospitals and Sri Lanka Insurance Corporation involving Nalaka Godahewa (whose last position was Chairman of the Securities and Exchange Commission) cannot be probed as the files with documents relating these transactions have not been located so far.
These files may have been vanished into thin air along with persons who handled it, he added.
He said a complaint has also been made to the CID on the missing files and that it had been in the possession of the former Treasury Secretary P.B. Jayasundera but the CID is yet to question the former Secretary.