4 December, 2020

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Inland Revenue Dept To Investigate SriLankan Airlines’ Crew Allowance Fraud

The Inland Revenue Department of Sri Lanka says that SriLankan Airlines has been practicing illegal methods to defraud EPF/ETF and Tax payments.

SriLankan Airlines has over the years been paying flying meal allowances in the billions of rupees annually to both its pilots and cabin crew at overseas hotels for long trips and also as a payment locally for short trips which is not highlighted in their salary slips.

SriLankan airlinesAlso Pilots and Cabin Crew have not been paying taxes to the government for these received funds.

When Colombo Telegraph contacted Inland Revenue Department official Mahinda Gunaweera, he said “a thorough investigation ought to be carried out in this regard if the details exposed by Colombo Telegraph were true”.

This faux pas made by the airline was highlighted by default when an unelected body of Flight Attendant Union Ex-Co Members sent a letter of demand to the airline’s management seeking EPF/ETF contributions for these said allowances.

An approximate sum of US $ 1000 – 1200 is paid to both the pilots and cabin crew in the form of meal allowances per month. When on overseas flights they get paid this allowance in the relevant country’s local currency. For flights operated such as short day trips where they return to base, these allowances are then paid in an separate pay slip which is not taxed.

The cabin crew basic salaries are relatively low compared to the actual amount of money they pocket at the end of the month.

Besides the basic salary, both pilots and cabin crew are paid meal allowances ranging between US $ 95-105 per day when on duty. This full payment is paid despite the fact that meals are provided on board for them whilst on duty.

“Basically the pilots and cabin crew get to eat whilst on duty and are also are paid these allowances” confirmed a manager within the airline’s In Flight Service Department. “We are now considering in not paying the crew any meal allowances in future when on overseas, but rather ask them to consume food at the hotel and sign for it. That way this EPF /ETF issue is not going to surface” he said also on condition of anonymity.

In comparison other successful carriers around the world usually pay the pilots and cabin crew a meal allowance only for the duration that their staff stay in the hotel.

But at Sri Lankan Airlines the Pilots Guild and the Flight Attendants Union seemed to have got their own way.

Despite these payments they are also paid another mind blowing allowance termed as “Productivity Pay”, which is a payment paid to these high flyers for merely turning up for work.

No other employee of any other department is afforded this luxury.

The unelected Flight Attendant Union body that sent the letter of demand to the airline’s management comprised of President Adrian Cramer, Treasurer Elseworth Weerasinghe and Secretary Lanka Kamalgoda.

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Latest comments

  • 6
    1

    Yeow! What’s this then?

    ‘The Inland Revenue Department of Sri Lanka says that SriLankan Airlines has been practicing illegal methods to defraud EPF/ETF and Tax payments.’

    Could we please amend the above to read:
    ‘The Inland Revenue Department of Sri Lanka says that Sri Lankan Airlines has been practicing illegal methods to defraud the TAX PAYER of this country. Period.’

    • 4
      3

      All fixed allowances are subject to EPF and ETF and that is the simple rule. Also the allowances for flights may become taxable since they are not a reimbursement.

      Mmmmmmm interesting times and for sure tax office will want to have a look at it.

      By the way the most cabin crew get approx Rs 500,000 per month when they undertake their full quota of flights and hence all of them are taxable.

      Cannot understand as to why a meal allowance should be paid to Indian sub continent flights or to Maldives.

  • 12
    3

    The airline management need not worry about making profit as the government underwrites the losses. They can pay as much as they like and still cheat the taxman, or the tax payer. There are also other illegal activities of favouritism to pretty faces and body-service-providors. This is Sri Lankan style.

  • 6
    2

    May I respectfully recommend to the Board of SriLankan that the airline be registered as an approved charity for the purposes of Section 34 of the Inland Revenue Act, No. 10 of 2006 with the Sri Lankan Department of Inland Revenue, Sri Lanka, Chittampalam A. Gardiner Mawatha, Colombo 02.

    I happily forfeit my fee for this recommendation.

  • 7
    1

    The ‘mind blowing allowance’ of productivity pay is not unique. Our MPs have been drawing Rs. 500 a day for just for turning up at the Parliament for the last 30 years or more. This is in addition to their regular pay, subsidised food and drink and other perks. PM wanted to increase this to unimaginable 20,000 a day! Srilankan may have just copied from the legislators.

  • 10
    1

    ‘Inland Revenue Dept To Investigate SriLankan Airlines Crew Allowance Fraud’

    But who will investigate the Inland Revenue?

  • 2
    2

    Will this be the same as the weliamuna probe? What happened for the results? So now what will happen for the inland revenue probe as well…
    Whatever said and done, one thing is clear. The authorities who introduced special schemes like high flyers should be sent home. The scheme could have renames as high pleasures! Head of hr once organized a high flyer awards ceremony spending millions of the company money. Cabin crew were stripped and exposed. Investigate and see, when a company as such is losing profit day by day how ethical is to spend millions on such programs!
    And also recently this ordinary level pass green manager is going to provide hibrid cars for all managers who are using company vehicles. As a cost saving measure why can’t they stop giving any vehicle at all! These so called managers are getting huge salaries with transport and fuel allowances, entertainment allowances etc. let them sort out a way of coming to office. Why a company bother so much about that?
    Why do Singapore has a layover? Why does Dubai has a layover? Unwanted costs? Flying time is less than 6 hours for both the destinations? These are the things company can look into reducing cost.
    Why you provide unwanted duty travel for staff? This green manager has travelled the world with company money. Head of hr justifies with big English words and has traveled the world

    • 6
      1

      Crew cannot fly for more than 8 or 10 hours straight.. forget the actual figure but it’s within that range unless they carry a relief crew. Dubai and Singapore are close to exceeding that figure on the return leg but I have seen crews which fly the return leg too. Bangkok is an exception since they fly all the way to Guangzhou so they dump the crew in Thailand.

  • 5
    4

    Thanks to the former Chairman Wickramasinghe and his love for stewardesses the cabin crew got whatever they wanted. He even doubled their salaries by introducing a scheme called ‘productivity pay’ that worked out to be much much more than even their basic salaries. This was the carnage that this old man resorted to. This ‘productivity pay’ is paid to the the crew if they fly or not. Even if they stay at home they benefit from this offer given to them. Basically their salaries were doubled and not any other staff. All other departmental staff were not taken care of. For example what the ground staff girls get paid for a month as salaries is given to the cabin crew as a single day’s meal allowance. How about that? Ashamed to tell that. Also a grooming allowance of Rs 5000 is paid to the cabin crew whilst the ground staff girls get paid Rs 2000. You cant even buy one lipstick with that amount. Besides they have to be equally well dressed at the airport on duty and look nice. Take Japan Airlines CEO for example. Watch his video on youtube. He is an example even our managers should follow. Our managers are pampered too much and behave like gods. They should be ashamed for running the airline to such big losses. they just dont care. Why should they? Come to think of it not only the pilots and cabin crew even the Chairman, CEO, Board of Directors and all top managers are also guilty of this fraud. Even they travel and take huge allowances which is unaccounted for. Even they dont pay tax for these monies. They should be taxed for this like other citizens of the country. This whole airline is a joke how it is managed. We have no choice we have to keep quiet because we need our jobs on ground. Thanks Colombo Telegraph only you highlight these issues into the open. Hope things will change for the good.

  • 3
    2

    My dear f=ma,
    If Nishantha Wickramasinghe was still the chairman of the airline he would have certainly recruited you as the cabin crew rostering manager. With such a sound knowledge you have displayed on crew flying duty period matters perhaps he would have got you to roster his girl friend stewardess on all his official flights then.
    Cheers
    Ayubowan

    • 0
      0

      yes, I would definitely be the cabin crew manager if I had a management style like his and I will assure you that I will roster the finest on your flight too, just tip them in the end like my boss does. I mean what a great job would that be? I would get that 6 figure monthly base salary, the additional grooming fees and the finest chicks in the island.

      ‘With such a sound knowledge you have displayed on crew flying duty PERIOD matters’.. unfortunately I don’t think I will be able to sync her period with her roster :D

  • 4
    0

    I would support paying tax free allowance for these girls as their job has a use by date, am I right.

  • 4
    2

    It is surprising that a reasonable meal allowance paid when an employee is away from his/her home office is taxable in Sri Lanka.

    EFT/ETF may have to be paid on meal allowances but paying income tax on a reasonable meal allowance received when you are outside the country on business seems unfair. What is the rational in taxing a meal or travel allowance received when you away in foreign location? What is the benefit to the employee? Reasonable meal allowances received by employees when they are away from home on business are not taxed in Australia and Canada. I doubt the meal allowances received by Sri Lankan cabin crew are unreasonable. Probably, they get what the cabin crews of other airlines get.

  • 2
    2

    Fraud in every form is synonymous with Air Lanka. This white elephant is bleeding us. Shut it down.

  • 1
    1

    When Peter hill was the CEO, it was running well.MR sacked him because he could not give a first class seat to his stooges.What a great president we had.

  • 2
    1

    This issue is blown out of proportion.
    If the staff has writen to the company on a matter and the company management has leaked it to the press then the CEO must be asked to go home for releasing internal discussions to the press.( or he should come out and defend all this slander of his staff) When these guys can’t prove themselves with results. They try to take the entire staff down with them. The present CEO who has surrounded himself with MRs cronies at UL is now targeting the very people who worked for government change.
    Before too long he will be found out as the numbers will do the talking.

  • 0
    0

    That’s really thiinnkg at a high level

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