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Alleged sugar scam: JVP files FR today

12 Mar 2021

  • ‘Complaint 3 months ago, still no probe’

  • ‘Matter comes under Bribery Commission’: Police

  The Janatha Vimukthi Peramuna (JVP) will file a Fundamental Rights (FR) petition in the Supreme Court today (12) over the alleged sugar import scam, having first lodged a complaint at the Criminal Investigations Department (CID) regarding the matter in early January. The case would be filed by former MP Sunil Handunetti and Attorney-at-Law Sunil Watagala in the Supreme Court today at 9.00am requesting relief for this alleged violation of fundamental rights of the public. JVP Politburo Member former MP Dr. Nalinda Jayatissa told The Morning yesterday (11) that due to the reduction of taxes on imported sugar, the Government had incurred a loss of Rs. 15.9 billion, and that this led to cuts on relief that has been provided to the public during the Covid-19 pandemic. JVP Politburo Member Wasantha Samarasinghe claimed that no proper investigation has yet been initiated into the money looted from the alleged scam. He said that while the JVP had lodged a complaint at the CID regarding the matter, there is no evidence of any progress being made on the investigation. “We lodged our complaint on 4 January with the CID over the sugar import scam, which has cost the State over Rs. 10 billion,” he told The Morning. Samarasinghe added: “We got an acknowledgment letter from the CID mentioning that they received the complaint, but there is no sign of an investigation yet.” Samarasinghe said that the import tax of Rs. 50 on a kilo of sugar was dropped to 25 cents in October 2020, together with the taxes of other commodities, paving the way for the scam to take place. Police Media Spokesman Deputy Inspector General of Police Ajith Rohana said upon inquiry that the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) is the institution with the mandate to investigate this incident, and that the investigations have been directed to the relevant institutions. However, when contacted, the Ministry of Finance denied the allegations regarding the said sugar scam. Speaking to The Morning, Secretary to the Treasury and Ministry of Finance S.R. Attygalle said that if there is any fraud taking place, the CID should conduct an investigation. “We never said that there was a scam or that revenue had been lost. We have mentioned foregone revenue. If they don’t understand the difference between revenue lost and foregone, what can we do? The Parliamentary Committee on Public Accounts (COPA) requested a report regarding imports and we provided it. These statistics were taken from the Sri Lanka Customs,” he said. Customs Director General G.D. Chandra Ekanayake also confirmed that this report was sent according to the statistics given by the Customs. According to Attygalle, all these allegations are interpretations anyone can make. “Anyone can interpret anything from this data,” he said. By October 2020, the retail price of a kilo of sugar had exceeded Rs. 130. The Government has said that in a bid to reduce the retail price of sugar in the market, it reduced the import tax on a kilo of sugar from Rs. 50 to 25 cents on 13 October 2020. When questioned as to what had taken place, Attygalle said: “Nothing has happened. The import tax was reduced to 25 cents. Then the sugar prices reduced.” However, sugar importers work on a credit basis, where the financial cost is also added, and the importers will have to add these charges to the price of sugar since they don’t engage in charity, Attygalle added. At the time, sugar importers had about 90,000 metric tons (MTs) of sugar, imported after paying an import tax of Rs. 50 in storage. After it was stated that the retail price of sugar cannot be reduced, the Government increased the income tax imposed on a kilo of sugar to Rs. 40 on 27 October. According to the Special Commodity Levy Act, the increased tax will only come into force a month later. Thereby, the amended tax value could not come into force between 13 October and 13 November. During this period, one specific sugar importer was able to import 100,000 MT of sugar, subject to an import tax of just 25 cents. According to what was revealed in Parliament, the loss suffered by the Government as a result of this was close to Rs. 10 billion. Secretary to the Ministry of Trade J.M. Bhadranie Jayawardhana added: “Sugar is an essential commodity where the Ministry of Finance would make changes in taxes. This is to protect the consumer. “This decision was not only for sugar. It applied for dhal and onions as well. However, after reducing these taxes, automatically the prices should also be reduced. But the price of sugar was not reduced according to tax release during this period.” According to Jayawardhana, Trade Ministry officials had met sugar importers 25 times to discuss this matter from 15 October 2020 till 25 February 2021. The Price Committee has been advised to submit a report regarding this matter to the Consumer Affairs Authority (CAA), she added. CAA Chairman D. M. S. Dissanayaka, speaking to The Morning, said that the ceiling imposed on wholesale and retail prices of sugar was removed a long time ago. “We are unable to keep a control price because the prices of goods fluctuate according to the world market prices. This applies for other goods as well, not only for sugar,” he said.

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