LIOC refutes tax evasion allegations
Lanka Indian Oil Company (LIOC) denied allegations levelled against
the company by Ceylon Petroleum Corporation (CPC) trade unions and said
that LIOC pays all due taxes to the Inland Revenue Department before
unloading the imported fuel.
Nobody can import petroleum into the country without paying taxes in
advance and LIOC pays a day before unloading, Managing Director of the
LIOC K.Ramakrishnan told the Sunday Observer. He said that some media
abuse press freedom and publish 'sensational' reports about the LIOC.
LIOC does not carry out any unethical practices, he said. Whether it is
imported via Colombo port or from Trincomalee, the tax procedure is the
same and all petroleum importers have to fall in line, Ramakrishnan
CPC trade unions accused that LIOC had defaulted Rs.12.5 billion as
tax payments to the government.
Unions continue questioning LIOC operations in Sri Lanka and said
that Sri Lankan authorities are taking decisions for personal gains and
not for the country. CPC Common Service Union said that LIOC owes
Rs.12.5 billion as taxes to the government while government is paying
interest at 11% for Rs. 4,960 million government owes to the LIOC as
outstanding subsidy payments. Unions have complained to the Auditor
General to investigate the issue.
The money is tax revenue already collected from the consumers, CPC
Common Service Union representative said. Acting Auditor General
W.D.Hemarathne said that he had received a complaint and investigations
are in progress but refused to comment further.
CPC Common Service Union also said that all decisions taken by the
authorities give more and more privileges to the LIOC and thus the
competitiveness of the CPC to deteriorate in the market. Government has
decided to end the share sales and purchase agreement with LIOC by
December 31, 2006 while it was to lapse by December 2008.
With the termination of the agreement, LIOC gets huge benefits and it
can supply fuel at highly competitive price than the CPC. LIOC can now
get oil from China Bay oil tanks of the IOC and this would reduce LIOC
fuel cost by $1.14 per tonne which pays as throughput charge when it
imports oil via Colombo.
Freight charges of Colombo port is $3 per tonne and for China bay oil
it is $ 0.26 per tonne. With the termination of the agreement LIOC is
permitted to open new filling stations and this would increase the
market share of the LIOC, he said.