Alleged abuse of MPs’ tax-free vehicle permits: SC directs to issue notice returnable for 16 March

By S.S. Selvanayagam

The Supreme Court yesterday (13) directed to issue notice on the Bribery Commission returnable for 16 March in respect of a Writ petition on the alleged abuse of the tax-free vehicle permit scheme to Parliamentarians and Ministers.

The Bench Comprised Justices Priyasath Dep, Priyantha Jayawardane and Anil Gooneratne.

A public interest litigation activist Nagananda Kodituwakku filed the Writ application seeking the Supreme Court to compel the Bribery Commission to initiate investigation into his complaint against the alleged abuse of the tax-free vehicle permit scheme to the Parliamentarians and Ministers.

The Petitioner who is a former Head of Customs Revenue Task Force has alleged that certain Parliamentarians and Ministers have patently abused the public office to defraud the Government’s tax-revenue for their own enrichment.

He cited the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), its members, its former Director General, State Minister of Finance Lakshman Yapa Abeywardena, Parliamentarians, General Secretary of the UNP and Minister of Public Enterprise Development Kabir Hashim, Prime Minister and the Attorney General as Respondents. Deputy Solicitor General Viraj Dayaratne appeared for the Attorney General.

He states the law requires every person elected or appointed to any Public Office to uphold and defend the Constitution and to preserve and protect public property and to combat misuse and waste of public property with due respect to rights and freedoms of others.

He laments the deception of citizenry has become customary for dishonest politicians.

He states as a result of abuse of tax-free permits offered to MPs, he discovered that the Government had been incurring a colossal loss of revenue under the previous Mahinda Rajapaksa regime and a formal complaint was made on 11 December 2014 to the CIABOC to initiate an investigation into the matter forthwith. 

These losses amounting to over Rs. 40 billion a year were evidenced in the content of the first fiscal policy statement (Budget speech for the year 2015-2016) made in the Parliament on 20 November 2015, by the 83rd Respondent (the Minister of Finance) where it was proposed to abolish such schemes altogether.

He states the issuance of MP tax-free permits by the Secretary to the Ministry of Parliamentary Reforms and Mass Media commenced in February 2016 with no legal authority conferred in him to grant any such exemption.

He added the Excise Act (Section 3C) permits the Minister to grant tax exemptions only having regard to the ‘Economic Development of the country’. MPs’ permits also have been issued with the aim of realisation of this objective (enabling them to use these vehicles to discharge their office efficiently and effectively for public good).

He alleged the MPs who have sold their permits have patently violated the law and that the Minister has intentionally avoided the inclusion of this statutory stipulation in the Gazette Notification (No. 1965/2 of 2 May 2016), enabling the dishonest MPs to encash the permit in the open market and share the tax component defrauded with the motor trade.

The Section 3C (3) also requires that in the event of sale or disposal of any goods imported tax-free, to obtain prior approval and to pay all levies prior to the sale or disposal of any such goods, he said.

None of the MPs have adhered to this statutory stipulation and openly abused the permits for unjust enrichment whilst the CIABOC made to condone this breach of law, he alleged.

Some of the vehicles imported under MP tax-free permits are registered in the name of the permit holder MP and are being used by those who have bought the permits and imported the vehicles, he stated.

The sharing of defrauded Government revenue between the importer and the MP is not only ethically wrong and also amounts to the breach of the Section 3 (g) of the of Fiscal Management (Responsibility) Act, he pointed out.