Self-serving policies

UNFAIRNESS and wastage are a regular part of Government policy making, it would seem, as new plans are being revved up to give duty free vehicle permits even to former provincial councillors regardless of the fact that Rs.57 billion has already been lost in public funds through such moves.

It was reported that Cabinet on Thursday agreed to allow former provincial council members who have served for more than two-and-a-half years to be eligible for duty free permits. If that were not enough, Cabinet had approved a second bill for provincial councillors who were elected to the current bodies but chose to resign for various reasons to be given permits as well. Though the latter is likely to be few and far between, there will be hundreds of already financially-stable people applying for permits under this new scheme.

So far the Government has forgone a staggering Rs. 57 billion in revenue during the past two years in granting duty free concessions for import of vehicles for public servants. The hefty sum was revealed in the Central Bank’s 2012 Annual Report released last month. It said according to the Ministry of Finance and Planning estimates, the Government had forgone Rs. 38.6 billion due to the exemptions of relevant taxes on vehicles procured by public servants on concessionary duty terms in 2012 and in the previous the figure is estimated at Rs. 18.3 billion.

In addition Transport Minister Kumara Welgama told Parliament in February that an estimated Rs.6.4 billion was lost in taxes to the Government in 2010 alone. This means that the total amount of losses for the past three years alone is a whopping Rs. 63.4 billion. To put the figure in perspective, this amount would have paid the entire losses incurred by the Ceylon Electricity Board (CEB) in 2012, which would have negated the need to increase tariffs or would have paid the fertiliser subsidy twice over or funded the Samurdhi program for 10 years. The unfairness is exacerbated by vehicle rackets that are also largely run by public workers.

Welgama in his previous statement had rather boldly remarked that the Department of Motor Traffic is not solely responsible for the tax loss and cited the Import and Export Controller, Customs, and the three armed forces as being equally responsible. According to Minister Welgama, permits were issued to import vehicle bodies to replace those damaged in the tsunami. Using such body import permits, while importing bodies, other vehicle parts were also imported evading taxes and vehicles were assembled locally.

The Ministry has a ballpark figure of 19,000 such cases using old vehicle registration documents and using number plates of vehicles sold for scrap with chassis and engine numbers engraved illegally. The Minister had also alleged that this is a racket that employees of the Department of Motor Traffic and the Department of Customs have been engaged in for a number of years.

It is certainly ironic that while honest people take out crippling loans or sacrifice their savings to pay for their vehicles, another set is pocketing the revenues that should be added to the public coffers. Given the high and often unfair level of tax rates and lax policing, it is hardly surprising that many feel no guilt in essentially stealing from the State. Add to these rumours of Rolls Royce and high-powered motor bike imports, and any expectation of justice for the common man crashes.