The State Minister of Finance Lakshman Yapa Abeywardena on the 25th of October 2016, responding to a question raised by media on MP tax free car permits being sold in the open market said that ‘selling of duty-free car permits made available to them was not a big issue’ and they had been following that practice for a long time raising money and therefore it was not a contentious matter though it was contrary to the law.
When the same question was put to Finance Minister Ravi Karunanayake by the BBC fortnight ago he said ‘tax-free permit is an asset to a MP and therefore there is nothing wrong in selling them.’ Yet, he refused to accept that MPs were selling their permits defrauding the government tax revenue.
Now I invite the readers to examine the view expressed by the Minister of Finance, Ravi Karunanayake presenting his maiden budget on 20th Nov 2015 on the abuse of tax-free car permits during the previous Mahinda Rajapakse regime; which is self-explanatory.
‘… Honorable Speaker, the vehicle permit schemes have been politicized and misused and have created a huge revenue loss over Rs. 40 billion a year to the Government. I propose to abolish all the vehicle permits granted under different schemes, including to Parliamentarians. However, I ensure all government officers will be financially compensated for the benefit foregone. Further, all the vehicles purchased to the Government will be subject to all applicable taxes and necessary allocations will be provided in the Budget…’
Yet, the people are aware that the same Minister re-commenced issuing of tax-free car permits to all 225 MPs within a period of three months from making this bold statement, seemingly to insult the intelligence of the people.
Being an investigative public interests litigation activist I have conducted an in-depth study into this abuse and found out that the total loss to the government revenue would be over 7 billion rupees as the result of the re-launching the tax-free car permit scheme for MPs by the Yahapalanaya administration.
By the end of the month of October 2016, 77 vehicles had been imported on these tax-permits, defrauding tax revenue, for instance, Rs 33,459,250 for a Toyota Land Cruiser and Rs 44,701,750 for a Hummer jeep. There are more vehicles arriving at the port on regular basis.
It is disheartening to note that this kind of utter waste of public funds is being taking place while people are being burdened with heavy taxes and are being compelled to protest against the budget proposals for the fiscal year 2016/17. It is also noted that the government has also proposed to allocate Rs 700,000/- per month for a vehicle that would be acquired on ‘Operational lease basis’ for 58 government MPs. This is on top of 225 tax-free permits already issued for unjust enrichment by defrauding the government’s tax revenue.
The citizenry should realize that the government is abusing their tax money with no benefit whatsoever to the taxpayers.
The need to compel the government to recoup the defrauded tax revenue
The only option available to the people now is to launch an aggressive campaign compelling the government to rethink of its fiscal policy concerning the tax-free car permit schemes.
Initiative proposed: Withholding income tax payments
People keep on paying their tax dues with hard-earned money to be used by the government only for the public goods and not for the private benefit of the politicians. As illustrated above, the government is just playing with tax-revenue as it pleases with no regard to its constitutional obligation of ‘eliminating economic and social privilege and disparity and exploitation by the State’ [Article 27(7) of the Constitution].
Therefore, I have taken an initiative to withhold my income tax payment for the fiscal year 2015/16 until such time the government takes measures to recover the tax revenue defrauded by the MPs on their tax-free car permits.
The Commissioner General of Inland Revenue was informed on 18th November 2016 and accordingly and my ‘tax return’ without accompanying the payment due and explaining the grounds for withholding the payment. The necessary funds to meet the income due is secured in the bank under advice to release the same once the government respects its duty to recover the tax-revenue defrauded by those are holding office in the Legislature and in the Executive.