Data provided in recent declarations by them for Customs purposes shows that two luxury motor vehicles with a street value of over Rs. 40 million each had been imported tax-free by them, citing themselves as MPs.
This is despite the present regime, in its first fiscal policy statement presented to parliament on 20 November 2015 by finance minister Ravi Karunanayake declaring that the tax free car permit schemes adopted by the previous regime was open to abuse where the government had been incurring a revenue loss of Rs. 40 billion a year.
Karunanayake proposed to abolish all tax free permits including the issuance of such permits to MPs.
Beginning from February 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.
The investigation carried out into this MP car permit abuse confirmed that these permits are freely sold for not less than Rs. 25 million in the open market with buyers importing expensive vehicles, which are then registered in their names as new owners, despite they are not entitled to enjoy this tax-free privilege at all.
Motor car dealers have abused these permits to import luxury vehicles absolutely tax free, whereas importers are liable to pay tax at the rate of 300 per cent if not for the MP tax-free car permits.
This fraud was first reported to the Bribery Commission on 11 December 2014.
However, on 04 March 2015, the then Director General of CIABOC refused to enforce law citing that the conditions in the tax-free permits were decided as policy of the government.
On 26 August 2016, a second complaint was made to the CIABOC, which was supported by credible evidence relating to importation, registration and simultaneous transfer of such tax-free vehicles in the names of buyers of such permits.
Yet, once again the CIABOC failed to initiate action on the complaint, totally disregarding its duty to combat corruption.
As the CIABOC 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 December 2016 purely in the public interest.
When this matter came up before the court, the attorney general informed that CIABOC would conduct investigation into this abuse.
Accordingly, the court re-fixed the matter for 09 May 2017.