While the public was ordered to tighten their belts, and pay up increased taxes, Finance Minister Ravi Karunanayake this month imported a brand new super luxury Mercedes Benz from Germany with a duty free vehicle permit, which resulted in the country losing millions of rupees in revenue.
The total tax waived off for Karunanayake’s luxury Benz which was imported on November 2, 2016 is approximately Rs. 29 million on the vehicle. The custom’s declaration form in possession of the Colombo Telegraph has been signed by the Finance Minister himself.
According to the Ministry of Parliamentary Reforms and Mass Media, which issued the permit to Karunanayake, the CIF value of the vehicle should be US $ 62,500 or any other currency equivalent to this amount for a petrol or diesel vehicle, and Karunanayake can import any vehicle of his choice and no limit was granted to the engine capacity of the vehicle.
Meanwhile in a letter addressed to the Director General of Customs, lawyer and rights activist Nagananda Kodituwakku in a letter dated November 10, 2016 accused the Director General of intentionally violating the Constitutional rights conferred in all citizens in terms of Article 14A (1) (b) of the Constitution and Section 3 of the Right to Information Act No 12 of 2016 and also the provisions of Section 6 Paragraph XLVII of Volume II of the Establishment Code – to obtain the said information helped with the office of the Director General of Customs.
Kodituwakku accused the Director General of Customs that he had not only violated the public trust placed in his office, but had abused his office to protect the interest of dishonest politicians, while also helping them in unjust enrichment by defrauding the government revenue.
At least 77 MPs in Parliament have used their duty free permits to purchase luxury vehicles in 2016 alone, which has resulted in the country losing billions of rupees in revenue.
Most of the vehicles that have been imported have been Toyota Land Cruisers, Hummers, BMW’s and Mercedes Benz. In July, Kodituwakku told the Supreme Court that the MPs instantly make as much as Rs. 25 million for each permit they sold, which they receive free of charge from the government.
After coming to power, the Maithripala Sirisena – Ranil Wickremesinghe led administration, having appraised the colossal losses sustained under the Mahinda Rajapaksa administration, in its first budget presented in the parliament on November 20, 2015 declared that government had incurred a heavy loss of over 40 billion rupees on tax free car permits, therefore the administration proposed to abolish all such permits altogether including the permits issued to MPs which was openly abused by them.
However, few months later, the same Finance Minister Ravi Karunanayake who presented the initial fiscal policy statement made a U turn and made an order (published in the Gazette (No 1965/2 of 02nd May 2016) under Sec 3C of Excise (Special Provisions) Act exempting levies on motor vehicles imported by MPs with CIF value up to US $ 62,500/. However, as required by the law to protect the government revenue, there was no condition whatsoever imposed against the abuse of such permits, allowing MPs to sell their permits in the open market.