Implement Audit recommendations on sugar scam – HRCSL


By Faadhila Thassim 

Chairperson of the Human Rights Commission of Sri Lanka, retired Supreme Court Justice Rohini Marasinghe urged the Government to implement recommendations made by the Auditor General in regard to the sugar scam that resulted in a loss of over Rs 16 billion to the Government.

Justice Marasinghe observed that the arbitrary and unreasonable use of State powers affects the economic, social, and cultural rights of citizens.

The Department of Trade and Investment Policy by Gazette No. 2197/12 reduced the levy imposed on one kilogramme of both white sugar and brown sugar from Rs 50 to 25 cents with effect from 14 October 2020, resulting in a loss of Rs 16 billion to the State and a loss of about Rs 102 million to Lanka Sathosa due to which it was termed a “sugar scam.”

The report recently published by the Auditor General also said these benefits were not passed on to consumers and that the trade community including importers and traders had paved the way for themselves to have a greater economic advantage through this reduction, while suppressing the Government’s intention to provide concessions to the consumers. 

It was further said Pyramid Wilmar (Pvt.) Ltd had also increased its sugar imports by 1,222 per cent during the period from October 2020 to February 2021 alone.

Thereby, the Auditor General made certain recommendations to rectify the resultant impacts of this reduction, including that of recovering the tax revenue foregone by the Government from the parties who retained the benefit in comparison to the reduction of the tax on sugar without passing it on to the consumers and considering the possibility of passing that economic benefit to the people in the future or otherwise.

Further, it was recommended to take action to make relevant policy decisions on accurate information through calling for existing relevant information from related institutions, analysing logically and the interconnection between the information in reducing taxes imposed on goods to provide relief to people.

Examining the reasons for failure in preventing expedited imports of sugar exceeding the present requirement of the country by implementing the licence procedure introduced for limiting imports and failure in proper, speedy, and meaningful implementation of the introduced licence procedure and the need to draw attention to find out the possibility of direct imports of sugar by Lanka Sathosa, which is sustaining losses by purchasing sugar at a high price from wholesalers and by selling sugar at low prices to consumers and drawing attention to prevent uneconomical purchases were among the recommendations made by the report.