|
The
PAC, submitting a report to Parliament yesterday,
highlighted large scale tax fraud in the Inland Revenue
Department running into billions of rupees.
The
report states that much of the Rs. 3.7 billion VAT fraud
at the IRD took place between 2002 & 2005.
“There
seems to be a strong correlation between the advent of the
tenure of Mr. A.A.Wijepala to the position of Commissioner
VAT and the increase in payment of fraudulent VAT
Funds,” the report submitted by PAC Chairman, Minister
Rauff Hakeem, states.
The
report notes that Rs.3.648 billion of fraudulent VAT
refunds, out of a total of Rs.3.922 billion, were made
when Mr.Wijepala was Commissioner of the IRD VAT branch
from 2003 to 2005.
“It
is imperative that the present Commissioner General of IRD
should be relieved of his duties until the investigations
are over,” the report stressed.
The
report also noted that the total VAT fraud is likely to be
in excess of what has been discovered so far.
Furthermore,
183 out of 235 documents relevant to refunds had gone
missing, and no internal investigation had been held into
the matter, despite it being reported to the Finance
Ministry. However the Auditor General’s Department and
the Police had not been notified of the missing files.
The
report notes that the Financial Regulations and
Establishment Code requirements had been ignored by the
IRD in its failure to conduct an internal investigation
into the reported tax fraud.
The
report states that Rs. 114.6 million was fraudulently
refunded by the IRD under the GST tax system, which was in
operation from 1998 to July 2002.
In
addition, the report notes, the IRD computer system had
been manipulated so that two VAT assessments amounting to
Rs.200.6 billion did not appear on the computer screen for
control and audit purposes.
In
view of such large-scale corruption, the PAC recommended
that the IRD conduct an internal investigation into the
fraud -- under the purview of the PAC.
It
also suggested that such an inquiry should expand beyond
the reported VAT fraud.
Minister
Hakeem, who presented the report to Parliament, referred
to a case in England where the Custom’s Chief resigned
because two CD’s had been incorrectly released from his
department.
He
called on MPs to refrain from imputing political
motivations to the PAC findings.
PAC
also recommended that the Ministry of Finance enact fresh
“Whistle blower” legislation to allow public sector
employees to report corruption in their institutions
without being victimized for their actions.
The
PAC report was hailed by the JVP and UNP in Parliament,
while Chief government Whip Jeyaraj Fernandopulle assured
the House that the government would not protect rogues.
Source
: Daily Mirror (subscription) - Sri Lanka, dated
30/11/2007
|
