Business

Customs restarts investigations into alleged tax fraud by multinational

  • Company under investigation sought injunction order against Customs

  • Local brand too filed case against said company: Customs DG 

 

Investigations have restarted into the alleged excise tax evasion of Rs. 1.5 billion reportedly committed by a leading multinational company in Sri Lanka through the importation of palm oil under a different HS Code, Sri Lanka Customs confirmed to The Sunday Morning Business

Newly appointed Sri Lanka Customs Director General (DG) Maj. (Retd.) General Vijitha Ravipriya told us that after he took over, he had ordered investigations into the alleged tax fraud of the aforementioned company.

“This case came out during the tenure of the previous DGs. When I took over, I asked officials to restart the probe now. I heard that a local cosmetics brand too has filed a case against the company in question,” Ravipriya added.

However, he was not certain about the exact amount of tax evaded by said multinational company, but noted that it would be somewhere around Rs. 1.5 billion.

A local media outlet recently reported that the multinational company had failed to settle excise duties amounting to Rs. 500 million and as a result, they were fined with an additional Rs. 1 billion – which the multinational company is yet to settle. 

According to the report, the company was importing palm oil into the country with a tax concession under a trade agreement for years. Accordingly, from 2000 to October 2018, it had been importing palm oil fatty acid into the country with a tax relief ranging from Rs. 650 million to Rs. 800 million per annum.

However, the report further noted that even after imposing a tax on palm oil imports, the multinational continued to enjoy the privileges of the particular free trade agreement (FTA), as it imported palm oil under a different HS Code. 

When we reached out to the multinational for comment, the company stated the following:

“The matter is currently before a court of law. We are unable to provide any comment at the moment, until legal proceedings have been concluded.”