Govt incurred Rs. 2.4 billion loss due to permits issued to import electric vehicles, COPA uncovers

A significant misuse has occurred in issuing permits for the importation of fully electric vehicles to Sri Lankans employed abroad, based on foreign remittances, the Committee on Public Accounts (COPA) has revealed. 

The matter was disclosed during a COPA meeting, chaired by Member of Parliament Aravinda Senarath, to discuss the special audit reports compiled regarding the scheme implemented between May 01, 2022, and September 15, 2023, to grant permits for the importation of fully electric vehicles for Sri Lankans employed abroad, based on foreign remittances. 

The statement issued by the Department of Communications of Parliament noted that during the meeting, the Auditor General pointed out that there are concerns that the scheme has been used for money laundering. 

He indicated that these suspicions emerged upon examining the entire procedure carried out in this regard. The Auditor General had further revealed that 1,077 vehicle permits were issued during this period, of which 77 permits were later canceled, and that two main institutions had operated as importers providing facilities for 640 permit holders. 

The Auditor General emphasized that this indicates the creation of a business under the pretext of permit issuance. Moreover, due to the increase of the luxury tax exemption threshold from Rs. 6 million to Rs. 12 million for 921 vehicles imported until September 30, 2024, the Auditor General stated that the government lost tax revenue amounting to Rs. 2.42 billion. 

It was also revealed that four individuals who had not traveled abroad during the relevant period were issued electric vehicle permits. The statement added that since the circular for the scheme did not specify a minimum duration of overseas employment required to be eligible for an electric vehicle permit, individuals who had been overseas for short periods ranging from three days to three months, as well as those who had traveled abroad intermittently, had been granted permits. 

Accordingly, COPA recommended that an internal investigation be conducted and a report be submitted within a month, and that disciplinary action be taken against the officials involved in these irregularities, the statement added.