The Colombo Additional Magistrate yesterday (8) ordered Financial Crimes Investigation Division (FCID) of the CID to commence a probe and report to Court with regard to the colossal loss of about Rs. 16 billion caused to the government by reducing the trade tax imposed on sugar from Rs 50 to 25 cents.
The Additional Magistrate made this order after the FCID of the CID reported to Court that it commenced a probe into the sugar scam, following instruction of the Committee on Public Enterprises on 21 June 2022.
The Government in October 2020 reduced the levy imposed on 1 kilogramme of both white sugar and brown sugar from Rs 50 to 25 cents, which, according to the recent report issued by the Auditor General, only benefited the trade community and the benefits were not passed on to consumers.
According to the Auditor General’s report, even following the tax reduction, Lanka Sathosa had sold sugar bought from private sector importers from time to time and it had resulted in a loss of about Rs 102 million to Lanka Sathosa during the period from 14 October 2020 (from the date of tax reduction) to 8 February 2021 (up to the date of removing the price ceiling).
It was observed by the report that even Lanka Sathosa, which is a government institution, had not taken necessary action to purchase sugar at the stock control price imposed by the Government and this loss was an additional charge on the Treasury. Further according to the report, Pyramid Wilmar (Pvt.) Ltd had also increased its sugar imports by 1,222 per cent during the period from October 2020 to February 2021.
BY Hansi Nanayakkara