No criminal offence in sugar tax reduction in 2020- CID tells court

By Bhagya Silva   

The Criminal Investigation Department (CID) informed the Colombo Magistrate’s Court yesterday that the Attorney General has concluded no criminal offence had occurred in the process of reducing the special commodity levy on imported sugar from Rs. 50 to 25 cents per kilogram, a decision made four years ago. Further investigation has been recommended to determine if any party or individual gained undue benefit or committed acts of bribery or corruption in connection with the tax cut.   

This information was presented before Additional Magistrate Keminda Perera during the proceedings related to the ongoing investigation into whether the benefit from the sugar tax reduction, which came into effect at midnight on October 13, 2020, was passed on to the public or wrongfully accrued by certain individuals or groups.   

The CID, citing the Attorney General’s opinion, stated that although no criminal wrong doing has been identified in the decision-making process of the tax reduction itself, the Attorney General has advised further inquiries to ascertain whether anyone received an illegal benefit, bribe, or engaged in corrupt transactions in relation to the policy decision.   
After reviewing the Attorney General’s guidance and related documents submitted by the CID, the Additional Magistrate instructed the CID to hand over all relevant reports, files, and evidence to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC). The Magistrate emphasised that CIABOC should continue the probe to identify whether any public officials or private individuals committed offences involving bribery or illicit gains as a result of the sugar tax reduction.   

The case arises from a complaint lodged by Mahinda Siriwardena, former Secretary to the Ministry of Finance, Economic Stabilisation, and National Policies, prompting the CID to launch an investigation. At the time, numerous parties alleged that the government incurred a loss exceeding Rs. 160 billion as a result of the tax cut and that the expected benefits were not passed on to the public, sparking claims of a large-scale sugar tax fraud.