Copa : Tissa Vitarana out Kabir Hashim in. Why?

by Prof. Tissa Vitarana

The Government has made a change in the composition of the Parliamentary Committee on Public Accounts ( COPA ). A major change is that its chairman, Tissa Vitarana, is no longer a member and thus no longer the chairman. As many people have asked me why this has occurred, I thought that for the record and to avoid any misunderstandings, I should make a public statement.

As COPA chairman I have done my duty to the best of my ability with the support of the members of the committee. At the outset I decided to probe the activities of the three main sources of revenue to Government, the Inland Revenue Department (IRD), the Customs, and the Excise Departments.

The Auditor General in his Report stated that many of the largest companies, including a major private bank, had not paid any income tax for six to seven years. When we probed this it came out that there were three successive Boards of Appeal in the IRD, and that a tax payer who did not get redress from the first Board of Appeal, could then go to the second and then the third board of Appeal as well. It would appear that the process took about a year and a half at each stage, so that the process could be delayed for five or more years. Then it would be possible to resort to the Law Courts as well. That was why the biggest contributors to Tax Revenue were able to avoid payment of their dues for so long, seriously affecting Government Revenue and Budgetary expenditure for national development. I, with the support of COPA, decided to propose to the Minister of Finance that there should be only one Board of Appeal in the IRD and that the matter should be settled within six months. Further that at least 50% of the tax amount should be collected at the outset, pending a decision on payment of the balance. I have been informed that both Big Business and some employees at the IRD were not happy with our proposal. Further suggestions were also made to ensure that the sharks were not able to escape the tax net, and officials were not able to take bribes.

With regard to the Customs Department, we found out that the HS Code was being manipulated to enable rich importers of large vehicles, companies or individuals, could avoid paying a substantial portion of the amount due to Government. To give one example, the category of “dual purpose vehicles” was being misused to enable luxury Mercedes Benz vehicles to pay the low duty applicable to ambulances. We proposed that the HS code should be made specific so that there would be a separate category each for ambulances and for luxury vehicles.

With regard to the Excise Department it was clear that adulteration of imported liquor was rampant and that little action was being taken against this abuse. The conduct of frequent raids and ensuring that the bottles collected were properly sealed and sent promptly to the Government Analyst for testing, required to be stepped up considerably if there was to be a significant impact. The attention being paid to stop or at least curtail the illicit liquor industry ( kassippu etc.) was totally inadequate. The conduct of frequent raids by a special Unit of well paid and well trained Police, located separately from the area Police, was essential to achieve a successful outcome.

COPA was also active in many other areas of public concern. To give an example my friend Dr. Prithiviraj Fernando was able to appear before officials of the Wild Life Department and show slides of his successful method for preventing the Elephant-Human conflict, based on protecting the village, and not trapping elephants. On following up we found that no progress had been made. The reason given was that the Wild Life Department had to follow their unsuccessful method of trapping the elephants as tenders had already been called for the purchase of the concrete columns and barbed wire.

The recommendations of COPA have to be sent to the Ministry concerned for action. If our suggestions led to loss of income to some officials the progress was not satisfactory. Further where we identified corrupt individuals there is no way of taking action against them. Not even to report to the Attorney General or the Police. This is very unsatisfactory and needs to be changed if COPA is to be more effective. Otherwise it is a waste of time and money. From what I have stated above, it will be evident why a government headed by Ranil Wickremesinghe will want me out of COPA and replace me with Kabir Hashim.