Monday, 15 July 2013 00:55
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DOING a U turn on initial plans to tighten permit driven vehicle imports the Finance Ministry has given the nod for Rs. 168 million worth of conveyances to be brought down just within the first four months of the year.
Initially the Finance Ministry decided to clamp down on vehicle imports till the Commonwealth Heads of Government Meeting (CHOGM) in November. After plans to imports staggering numbers of BMW and Rolls Royce cars were leaked to the media the government scrambled to explain away such massive public expenditure by insisting that existing vehicles would be used for CHOGM.
However, parliament was told last week that the Presidential Secretariat was given Rs. 25 million to purchase vehicles, while the Health Ministry and the Livestock and Rural Community Development Ministry were given around Rs. 23 million each. In addition, the Economic Development Ministry got over Rs. 14 million, Defence and Urban Development over Rs. 10 million while a sprinkling of other ministers had to be content with Rs. 6 million each.
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. 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 year 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. CHOGM or not the government intends to live large.
