By Nagananda Kodituwakku –

Nagananda Kodituwakku

Sri Lanka: A Failed State with no Direction?

It is a hard truth that no country can move forward when those hold office and exercise people’s Executive and Legislative power are absolutely corrupt. However, it is very unfortunate that in the case in Sri Lanka, where the people are being ruthlessly and openly abused by utterly corrupt politicos, who attempt to show the outside world that in Sri Lanka the rule of law prevails. However, the track record of the new regime for the last two years proves otherwise.

New Govt (MS-RW) pledges to combat corruption

In its first fiscal policy statement of the new MS-RW regime, presented to the Parliament on 20^th Nov 2015, Ravi Karunanayake, the Finance Minister, went on to declare that the tax free car permit schemes adopted by the previous MR regime was open to abuse where the government had been incurring a revenue loss of Rs. 40 billion a year, hence proposed to abolish all tax free permits including the issuance of such permits to MPs. An extract from his speech is given  below.

‘… 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…’

In spite of this bold declaration it is very unfortunate that the same Finance Minister violated the pledge made to the people within a span of just 60 days.

President Sirisena pledges to address people’s desire to fight corruption 

Whilst attending the World Anti-Corruption Summit in London on 12^th May 2016, President  Sirisena made a thought-provoking pledge to the world community accepting the responsibility to establish an administration free from all forms of corruption. He declared that ‘Corruption is one of the factors that promote political violence and other forms of human rights abuses. Sri Lanka went through such a stage during the previous administration. The people reacted strongly against corruption by changing the corrupt administration by the power of the ballet in January 2015 at the Presidential Election and again at the Parliamentary Election in the August 2016…’

And President Sirisena also declared that the current national unity government consists of two major political parties in the parliament under his leadership and the other led by Prime Minister Ranil Wickermesinghe both of whom were elected to office on the policy platform of democracy, good governance and rule of law with a prime duty to root out of corruption from the country.

Prime Minister Wickramesinghe’s stand against corruption

Ranil Wickremesinghe’s main slogan at the General Election held in August 2015 too was to eradicate corruption in the government business and to establish a government free of corruption that respects sovereignty in the people which includes the legislative, executive and judicial power.

The said declared policy against corruption by the government had been in line with the government fiscal policy enunciated in the Fiscal Management (Responsibility) Act No 3 of 2003 which reads as,  ‘Directing Principles and State Policy of the government’ and states that the government shall formulate its Fiscal and Economic Policy, having regard to the financial impact of its decisions on future generations [section 3 (g) of the Act] enacted inter alia to ensure and facilitate public scrutiny of fiscal policy and performance of the government.

Local and international media gave maximum publicity to the bold stand taken by the govt of President Sirisena to fight corruption whilst the citizens placed total trust in the Government’s declared policy against corruption. The international community as a whole valued the commitment of the new government to make Sri Lanka a better place. However,  it was a false hope.

MP car permit abuse exposes state-sponsored corruption at the highest level

From what has now been revealed about the organised frauds and corruption  involving those who hold office in the legislature and executive the government has begun losing its credibility in the eyes of the general public. In spite of more and more state-sponsored corruption coming into light in an unimaginable scale on a regular basis, the MP tax-free car permit abuse, continues to  occupy the most prominent place amongst them.

Beginning from Feb 2016, the new administration went  against its own fiscal policy statement of eradicating corruption with the re-introduction of the issuance of the tax-free car permits to all 225 MPs, enabling them to defraud public funds with total impunity.

How does the car permit scam defy the law causing a colossal loss of revenue? 

The tax-free car permits to MPs are issued in the pubic interest under Section 3C of the Excise (Special Provisions) Act No 08 of 1994, having regard to the economic development of the country facilitating the MPs to perform their office effectively and efficiently. However, the law stipulates that any person who intends to sell or dispose of any goods (including vehicles) imported tax-free shall obtain prior permission of the Director-General of Excise (in Sri Lanka tax charged on motor vehicles is called Excise duty) and to pay all levies exempted at the time of importation.

The investigation carried out into this MP car permit abuse, confirms that these permits are freely sold in the open market with buyers importing expensive vehicles and register them in their names as new owners, despite they  are not entitled to enjoy this tax-free privilege at all.

Complaints made to the CIABOC 

This fraud was first reported to the Commission to Investigate Allegation of Bribery or Corruption (CIABOC) on 11^th Dec 2014. However, on 04^th March 2015, the then Director General CIABOC refused to enforce law citing the following reason.

‘…The Conditions in the tax-free permits were decided as policy of the government. Therefore any loss caused to the government due to the implementation of such government policy will not fall within the scope of Section 70 of the Bribery Act. Accordingly, please note that the Commission will not take further action on your complaint.”

In the absence of the rule of law MPs misappropriate tax-revenue with total impunity 

The investigations conducted into this tax-free permit abuse revealed that these permits are sold by MPs for not less than 25 million rupees in the open market and the motor car dealers import luxury vehicles absolutely tax free, whereas such verhicles are liable to pay levies at the rate of 300% if not for the tax-free car permits.

The 2nd complaint made to the CIABOC

Then, on 26^th Aug 2016, a second complaint was made to the CIABOC, which was supported by credible evidence relating to importation, registration and simultaneous transfer of tax-free vehicles in the names of buyers of such permits who are not qualified to use this privilege. Yet, once again the CIABOC failed to initiate action on the complaint, totally disregarding its duty to combat corruption.   

Fundamental duty of the CIABOC

The office of the Chairman, and the other two members of the Commission and the office of Director General of CIABOC have been created with wide powers conferred in those offices, purely to perform their public office for public good.

Section 4(2) of the Act No. 19 of 1994 specifies that upon receipt of a communication under subsection (1) the Commission, if it is satisfied that such communication is genuine and that the communication discloses material upon which an investigation ought to be conducted, shall conduct such investigation as may be necessary for the purpose of deciding upon prosecution or other suitable action under the provisions of the Bribery Act or under any other law.

CIABOC, its Members and corrupt MPs are charged for corruption

As the CIABOC has failed in its statutory duty to combat corruption, the CIABOC, its Members and all MPs who have openly abused the tax free permits to defraud public funds were charged in the Supreme Court (SC/Writ/07/2016) on 19^th December 2016 in the public interest. And when this matter came up before the Court the Attorney General informed the Court that the CIABOC would conduct investigation into this abuse. The Petitioner declined to accept the AG’s view on the matter and  the matter has now been re-fixed  for 09th May 2017.

President Sirisena himself involving in the scam along with his predecessor 

Astonishing details involving President Sirisena and the former President Mahinda Rajapaksa in the MP car permit abuse have now come to light, throwing the citizenry into disbelief. The latest data obtained on the matter, demonstrates that two luxury vehicles valued over 40 millions rupees each, have been imported by the duo tax-free, citing themselves as MPs.

This is seen an act of contempt of the people’s undeniable sovereign rights, which they enjoy purely on trust.