Impossible to prosecute sugar tax policymakers

  • Finance State Minister Siyambalapitiya instructs IRD to submit report on relevant companies’ income tax

BY Buddhika Samaraweera


State Minister of Finance Ranjith Siyambalapitiya stated that it is not possible to recover the losses caused by the controversial sugar tax scam, nor will it be easy to take legal action against those who prepared the relevant policies.

Speaking to the media, he said: “Legally, if there was any fraud while reducing the taxes on the import of sugar, there is no way to recover the losses by raising the taxes again. Also, it is not easy to prosecute those who have made the relevant policies. If the policymakers say that their aim was to reduce the price of sugar, we will have no answers.”

However, he said that it is possible to ascertain whether the income tax collected from the relevant companies has increased during that period. Accordingly, he said that he has instructed the Commissioner General (CG) of the Inland Revenue Department (IRD) D.R.S. Hapuarachchi to submit a report on the same within 10 days.

He further said: “The IRD is meeting its revenue targets even in a crisis situation. Also, the Government should embark on a process of reducing the curiosity of the people regarding taxes. I also hope to take necessary steps regarding the situation that has arisen due to the reduction in the number of personal tax files from 1.5 million to 400,000.”

The Department of Trade and Investment Policy by Gazette Number 2197/12 reduced the levy imposed on a kilogra of both white sugar and brown sugar from Rs. 50 to 25 cents with effect from 14 October 2020, resulting in a loss of Rs. 16 billion to the Government and a loss of about Rs. 102 million to Lanka Sathosa due to which it was termed a “sugar scam”.

A report recently published by the Auditor General’s Department regarding the matter stated that these benefits were not passed onto the consumers and that the trade community including importers and traders had paved the way for themselves to have a greater economic advantage through this reduction, while suppressing the Government’s intention to provide concessions to the consumers.