The permit curse?

Members of Parliament representing all political parties have caused losses amounting to over Rs. 7 billion by selling duty-free vehicle permits without proper legal sanction. It is jaw-dropping that such a massive loss of public funds is allowed to happen with impunity year after year with no action taken. 

Among the offending MPs are members of the “Yahapalana” administration, the Tamil National Alliance (TNA) as well as the Joint Opposition loyal to former President Mahinda Rajapaksa. This information came to light this week when attorney-at-law and public litigation activist Nagananda Kodituwakku informed the SC that out of those vehicles sold so far, 45 were already registered under new owners. 

As the public is well aware, Sri Lanka’s finances are in a precarious situation because of high external debt, partly due to heavy infrastructure borrowing under the previous Government. However, austerity measures remain deeply unpopular and the Government rather than leading from the front has continued its handout program to political elites regardless of the massive revenue loss to the State. 

The Government suspended the Concessionary Vehicle Permits (CVP) in November 2015 citing the huge drain on foreign exchange, air pollution and traffic congestion. Senior public servants like Secretaries, additional Secretaries, Departmental Heads, Directors, District Secretaries, University dons, Chief Secretaries of Provincial Councils are among those eligible for the CVP.

Interestingly, it was Finance Minister Ravi Karunanayake who, during the 2016 Budget reading, proposed to end the practice of giving tax-free vehicles to State workers and elected ruling class. In his speech, Karunanayake admitted the Government had lost Rs. 147 billion in revenue from 2012 to August 2015 and acknowledged the system was “politicised” and “misused”.

According to the Finance Ministry, 32,237 vehicles have been imported to the country from 2012 to August this year with the concessionary permits. The Government has earned only Rs. 63.8 billion from them. Yet, almost immediately, the Government contradicted their statement by awarding members of parliament vehicle permits, which resulted in the Government Medical Officers Association (GMOA) demanding permits as well. The stalemate on principle was short lived as the Government returned to doling out permits freely and even rolled out an additional Rs.1.17 billion supplementary estimate to purchase vehicles for dozens of ministers. This was followed by about Rs.400 million earlier this year to buy extra vehicles for selected ministers, despite the Government hiking taxes and asking the public to tighten belts.

The Government has also steadfastly refrained from introducing a framework to define the type of vehicles that can be purchased by politicians and kept quiet about the estimated 20,000 vehicle permits likely to be released in stages for different levels of public servants. Vehicle permits are freely sold on the market at colossal prices and have sprouted a culture of corruption where the person the permit is issued for often sells it. The continued perk of vehicle permits will result in larger losses to the Government. Though a case can be made for deserving public servants at a time when the average Sri Lankan finds vehicles beyond their buying capacity it is unconscionable that the Government continues to feather the pockets of politicians and elites at the cost of public funds that could be used for essentials such as food, healthcare and education.