COPF ticks off Finance Ministry, IRD for failure to collect taxes from sugar scammers

The Committee on Public Finance (COPF) has expressed strong displeasure at the Ministry of Finance and the Inland Revenue Department’s failure to collect foregone taxes from major corporations implicated in the 2020 sugar scam.

The COPF has instructed the Inland Revenue Department to furnish a report on the sugar scam within a Week. The report should highlight the reasons for delays in taking action against the scammers and the expected recoveries from the 2020 sugar scam The Committee is led by SJB MP Dr. Harsha de Silva.

The COPF chair said the companies involved had been mentioned in a forensic report by the Auditor General.

The Committee has emphasised that the relevant institutions have not implemented any measures to ensure accountability, and that has allowed certain large corporations to unfairly benefit from the reduced tax rate at the expense of consumers.

The Committee has inquired about the extent of tax collection from the implicated companies and directed the Inland Revenue Department to submit a comprehensive report within a week.

The Committee has expressed concern over the proposed reversal of the tax policy, which aims to increase the Special Commodity Levy on sugar from 0.25 cents per kilo back to Rs 50.

The Committee has emphasised the need to hold wrongdoers accountable before imposing additional financial burdens on the public.The Committee had discussions with the officials from the Consumer Affairs Authority (CAA) to address concerns about the maximum retail price (MRP) not being adhered to by distributors. CAA officials revealed that despite conducting 342 raids and imposing fines on micro, small, and medium businesses exceeding the MRP, it was difficult to penalise wholesale distributors due to the absence of a maximum wholesale price in the gazette.

The Committee has directed the CAA to conduct a comprehensive study on the imposition of MRP, considering factors such as the Special Commodity Levy and importer prices. Furthermore, the Committee has requested the CAA to propose a mechanism to address the ongoing issue of wholesale distributors selling above the MRP and engaging in fraudulent activities.