CID steps in to probe more VAT frauds

A fresh probe on Value Added Tax (VAT) refund frauds amounting to Rs. 500 million has been launched by the Inland Revenue Department, officials said. The new probe related to six cases in which 20 people had been accused of fraudulently obtaining VAT refunds, they said.

The preliminary finding of the probe had been handed over to the Criminal Investigations Department (CID), they said. Tax Departmental officials told the Sunday Times that detectives from the CID had come to the department last week to obtain details related to the probe.

Inland Revenue Commissioner General K.M.S. Kandegedera confirmed the probe, but declined to comment saying he was bound by an oath of secrecy. In some of the cases VAT fraudsters had used forged documentation and in some instances several fake identity cards had been used to claim refunds. There were also allegations of bribery and corruption against VAT assessors, the officials said.
The CID’s Financial Crimes Division is also conducting two separate probes on the earlier multi-billion VAT scam that is pending in court.

The CID had also probed a VAT scam amounting to Rs. 60 million and the evidence has been handed over to the Attorney General’s Department. The investigation relates to a textile factory owner from Padukka. In the Rs. 3.9 billion widely-publicised VAT scam which took place in 2006, the main suspect Kamil Kuthubdeen is believed to be still in hiding. He was first reported to have been living in a hotel he owned in Dubai.

Six suspects who played a part in the Rs. 3.9 billion scam are in custody. The CID had requested assistance from Interpol to issue red notice warrants to crackdown on the suspects who are now living abroad.

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