26 May, 2019

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Tax-Free Car Permit Abuse By MPs And Ministers Comes Before Supreme Court

In a Writ Application (SC/Writs/02/2015) field in the Supreme Court yesterday, by the Public Interest litigator Nagananda Kodituwakku petitioned to the Supreme Court that the ‘Tax-Free Permit Scheme’ introduced in good faith to grant tax-free permits to import vehicles free from fiscal levies, enabling MPs and the Cabinet of Ministers to use the vehicles to effectively discharge their office, has since been abused by them, exploiting the permits for unjust enrichment by selling the permits in the open market and defeating the very objective of issuance of such permits in the public interest.

Nagananda Kodituwakku

Nagananda Kodituwakku

In the Petition filed in Court lawyer states that according to the said Schedule ‘A’ of the Customs Law (see the document 1 below), statutory levy on over 2500cc Diesel Motor vehicles classified under the HS Code 87033359 is 300% of the CIF value, whereas the statutory levy on a very small motor car of less than 1000cc, classified under HS Code 87032169 is 135% of the CIF value.

Producing Customs declarations to support his case, Lawyer Kodituwakku demonstrates how this system is abuse for unjust enrichment by the MPs and Ministers whilst exploiting poor taxpayers. Producing evidence (Cusdec No 4797 of 09th Feb 2015) (see the document 3 below) the lawyer demonstrates how for a small car (used 650cc Suzuki Alto Petrol car) Customs charge a levy of Rs 1,485,039.00, whilst luxury vehicles imported under permits are granted tax waivers. For instance Cusdec No 21781 dated 12th May 2015 (see the doc 2 below) produced to customs for the clearance of a Mitsubishi Montero Jeep, of over 2500 cc, Customs waives a levy of Rs.8,188,846.00, a fair share of which is syphoned by the permit holder, by selling the permit in the car market, a patent improper act done purely for unjust enrichment, denying the rightful revenue to the government.

Lawyer Kodituwakku states that he made a formal complaint in this regard to the Corruption Commission urging it to investigate this blatant abuse that falls well within Section 70 of the Bribery Act (causing loss to the government and/or profiting from abusing office) on 11th December 2014 and despite the said plausible complaint was made, the Commission failed to initiate any investigation into it. Instead the Lawyer says that he was informed by the Corruption Commission in its communication dated 04th March 2015 as follows;

“…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 …”

Therefore, lawyer Nagananda Kodituwakku pursue for a Writ of Mandamus against the Corruption Commission, compelling it to initiate a formal investigation/inquiry into this blatant abuse of tax free permit scheme for improper purpose of unjust enrichment by MPs and the Cabinet of Ministers, causing tremendous loss of tax revenue to the government.

And in the Motion filed in Court he request the Chief Justice that his case be listed for support before a Bench, which does not include Justice Buwaneka Aluwihare, PC, Justice Sisira J de Abrew, Justice Priyantha Jayawardena, PC, (arbitrarily appointed to the Supreme Court by President Rajapaksa) reporting that he has no trust and confidence in them.

Schedule ‘A’ of the Customs Law;

P1

 

Document 2;

P2

Document 3;

P3

 

 

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Latest comments

  • 7
    0

    do away with any duty free for anybody in the country including the president.Enshrine it as law with allowance only for god if he wants it.

    when you have exemptions like these naturally there will be rorts.It is human nature.So don’t have these loopholes in the first place.We have to become a strict country,strict with ourselves first if we want to become a singapore.Otherwise we will be only talking about that vision as usual.

    nagananda is the only hope for the country until we get a leader with a backbone like lee kuan yew one day.Nice guys won’t work here for us.

  • 9
    0

    There is no justification to give ANYONE duty-free. Do we get better work out-put? Loyalty? In what other countries is this given? India, China, etc ?? Never in the West and all pay income tax. All we do by this is marginalizing the State big-shots from the rest of the country. Over to you.

  • 4
    0

    As the BC has already decided the matter comes under Government Policy, and it is not a
    legal matter. If taxation revenue is denied, it is upto the Policy maker to make amends.

    If PI Litigator can take up this matter to Courts, I suppose evev the Port City “Tender” can be taken up in the same lines? The Duty-Free principles have been misused/abused and it is this that requires re-thinking under good-governance.

  • 2
    0

    There are many differences on rates, privileges and facilities afforded to MPs and those charged from ordinary citizens. I don’t say it is unjustified, but may be overblown. There are some who want to get into politics and into Parliament simply to get these privileges and get those benefits like what BBS is lately has done, riding on the wave of Sinhala Buddhist radicalism falsely masked as revivalism. It has now registered as a political party and once they get elected, will claim Parliamentary immunity to push its racist ideology. That is to get security bodyguards, luxury vehicles, tax free vehicle permit to sell at duty paid prices, cheap food at Parliament canteen, a housing allowance or special housing with unlimited electricity with cost at fixed rate of 2,000/= a month. Free water. Once a year Free foreign travel at government expense on government airline. No taxation of any kind, free calls, and then earn on commissions, and kickbacks on tenders. Nice going for them. Naturally, anyone who is incapable of any other means of earning a decent income, will do politics and will die to keep it in the family.

  • 7
    0

    Bravo a man with a backbone hail Kodituwakku.

  • 6
    0

    The most hilarious Permit was the CLERGY/PRIEST permits. All cars, All Suvs,and all vans upto 12 seats could be imported,if these vehicles are within 10 years.

    These Permits were suspended after a while due to the heavy demand from all Priests covering all sects.

    Srilanka, A Land like no other no doubt!

  • 3
    1

    After Gota Order made by the Supreme Court yesterday, MS RW regime must be feeling the heat for retaining Rajapakse appointees in the Supreme Court and Court of Appeal. In fact one man very loyal to MR refuse to attend the hearing for obvious reasons.

    Do not be surprise if these very people who benefited immensely under MR regime refused a Writ against the Corruption Commission.

  • 0
    0

    What happened when circulars on transfer changed overnight to accommodate Dammika’s permit cars landed? What happened to the customs officers challenged it?? What happened reassembled cars and bribery commissioner Balapatabendi’s bribe? Was it Nagananda who challenged it??? Is there any point in complaint to the bribery commission??

  • 1
    0

    These days MP and Minister permits are not available in the market. Almost all of them have been used.

    There is a huge demand for them with high valued permits for higher capacity vehicle permits and the trade is awaiting next round of issue of them.

  • 2
    0

    My opinion is that neither such comfortable duty free vehicles nor a big staff is necessary for them to do a service to the people in the district, of course if they are honest to politics and social service. Therefore it’s high time to limit the perks given to politicians. The other thing is it’s good for the country and the MPs themselves if the low is changed so that the pension is given for those who serve in the parliament at least two terms or ten years.

  • 2
    2

    Dear Mr. Kodithuwakku.Could you explain that how do you obtain Tax clearance for your car imported from United Kindom.Mercededes Benz car with UK number plate you used some times and changed very soon to Sri Lankan numberplate.Is that right? Also your family still living in the UK using all the benefits but you are working as a Human rights lawyer in Sri lanka in order to get cheap publicity through this web site..As a practicing lawyer think twice when you are filing action in the court. This practice is very common thing in Sri Lanka.That is not posible to stop filing action in court to stop this kind of matter widly practicing in our Motor trade.Good luck….

    Dinesh

  • 3
    1

    “Tax-Free Car Permit Abuse By MPs And Ministers Comes Before Supreme Court”
    Its not fair to single them out. Every person who received a car permit has abused it.
    NET IN EVERYBODY.

  • 0
    1

    “Tax-Free Permit Scheme’ introduced in good faith to grant tax-free permits to import vehicles free from fiscal levies, enabling MPs and the Cabinet of Ministers to use the vehicles to effectively discharge their office,”

    Are these minister and MP vehicles totally tax free or with lower tax? The permits for other groups like academics, doctors etc allow them to pay lower tax but don’t allow tax free import.

    I believe that selling a permit is now legal. Some years ago it was illegal but many sold their permits anyway. Maybe the rules have changed again?

  • 1
    0

    Fully agree. We need to put a full stop for issuance
    of Duty Free permits to all and sundry.I hope the
    authorities take note.

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 2
    0

    Mr Dinesh Kaluwitharana

    It appears that you are completely in the dark with regard to the content of your comment.

    Please note that no Mercedes Benz car was brought to Sri Lanka by me from from the UK. I brought my 5 year old Toyota RAV 4 (SM02USL) under the Carnet Convention about 5 years ago. (I doubt whether you are aware of this convention)

    Under this Convention I was entitled to keep the vehicle on payment of the statutory levies. I made a request in this regard but it was initially refused by the DGC. However, when his decision was challenged in the Court of Appeal, the DGC agreed to recover the applicable levies payable on the vehicle and registered it in Sri Lanka. Accordingly the relevant levies as determined by the DGC was paid and the vehicle was registered.

    The other matter you raised about my family living in the UK claiming benefits is also completely unfounded. We do not make any such benefits from the social security system in the UK but pay tax from what my family earns to the Inland Revenue and pay tax. Please have your facts correct before making allegations.

    Please also note that my commitment is for a PURPOSE and if the people of this country do not realise the role that I play with a tremendous risk to my life (check with Mirihana Police for several complaints made about apparent threat to my life, particularly during the case that I fought against Mr Mohan Peiris) I may probably leave for good.

    Please read the material available in the public domain that sets out under what circumstances I was forced to leave my motherland.

    • 0
      1

      Under the Carnet system a car can be brought to the country and used for a period of one year. How did you get to use it for 5 years? shipped it out and brought again 5 times? just wondering…

      I know you are doing something good by bringing up the main topic, but that wont let you off the hook…like how the Jarapassas are getting away with crimes and plundering of NATIONAL WEALTH…

  • 3
    1

    Why not the Government import the 225 vehicles and distribute them to the 225 Members.This will prevent the abuse as the vehicles will remain in Government’s name.The purpose of helping the Members to visit thir electorates would be served

  • 0
    0

    Mr Gaje

    You have mentioned about the detection made by a team of Customs Officers led Mr Lankadeva (ADC) in Nov 2012. This detection refers to a large number of permit cars imported by LOLC and LB Finance, evading the payment of applicable levies.

    Please note that further to full information provided by Mr Lankadeva to me about this abuse, (with a copy of the Treasury Circular issued with retrospective effect withdrawing all conditions imposed on imported licenses), this matter was reported to Corruption Commission on 15th Jan 2015 to conduct a proper investigation.

  • 1
    1

    It is reported that nearly 1.7 million Srilankans work
    or work and live overseas.It is through exports and
    the remittances from foreign employment and businesses
    that all imports and many millions of lives are taken
    care of.These forex earners must ask the authorities
    what kind of special treatment they get for shouldering
    the burden of a country that had in the past wasted all
    their forex resources on projects and privileges that
    we can not otherwise even imagine of.Policy makers
    must prioritize duty free according to services or
    there shouldn’t be any duty free at all.

  • 0
    0

    Test

  • 0
    0

    MPs are given car permits and they sell and use the money for election.
    Those expatriate workers who bring 6 billion dollars per year enjoyed the blue permit ( not duty free at all ) and the govt. stopped it. They contribute to the economy of the country. Suspension of their permit is very unfair.

  • 0
    0

    To me giving duty free concessions to a handful is a way of letting those people earning extra income because the government is unable to give them a reasonable minimum salary to meet their position. That is why the system allows such imports to be transferred to third parties even before it is used by the beneficiary.

    This is a hypocritical by the government. Give a good minimum wage based on CPI index to the deserving who contributor of the economy… not jokers who make money without moving their butt.

    Also, the fact is the price a Sri Lankan has to pay for a vehicle is 300% to that of other countries. The duty element controls the second hand value of the vehicles, not the ware and tare. Compare a same job role person in another country, with a person in SL, how unfair is it?

    We have a messed up system….. in effect unfair for the poor us middlemen.

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