Selvanathans profit from beer tax relief

Aug 01, 2016

The government stands to lose billions of rupees in revenue due to the nearly 60 per cent tax relief being given to Lion Brewery, which has the beer monopoly in Sri Lanka, reports say.

The company’s brewery at Biyagama was affected by the recent floods, and its production was suspended. After the company informed that it could not supply for the demand, several powerful ministers in the government have intervened and paved an opportunity for the company to import beer under tax relief.

 

Up to now, Lion Brewery paid Rs. 528 per litre as tax, and under the new tax relief, it will have to pay only Rs. 211 per litre to the state as tax. That means the state loses Rs. 317 per litre.

 

This tax relief will be effective until November. Reports say that Rs. 72 million had been lost by last week for the beer imported by the company. As per the estimates, the state will have to incur a total loss of Rs. 5.565 billion, according to reports.

 

In addition to getting this tax relief by the government, Lion Brewery is set to receive insurance compensation running into billions of rupees for the damage caused to its brewery.

 

Lion Brewery is owned by one of the wealthiest businessmen brothers in the country, Mano and Harry Selvanathan. They own Lion Brewery (Ceylon) PLC, Carson Cumberbatch PLC, Ceylon Guardian Investment Trust, Guardian Fund Management Trust and Bukit Darah PLC.

 

Bukit Darah PLC is a major company managing a 40,000 acre palm plantation in Malaysia.

 

Although many businesses have been affected by the floods, the ‘Yahapaalana’ government has given tax relief only to these two wealthy businessmen.

 

Ex-MP Sajin Vaas Gunawardena was imprisoned recently over a charge relating to the Selvanathan family too.

 

Sajin was accused of extorting a considerable amount of money from Mano’s son Krish, but an attempt was made at the related court hearing to portray it as a business transaction. That was a deal there too. Selvanathans who had struck deals with the Rajapaksas and their cronies then are today striking deals with the ‘Yahapaalanaya’, to swallow billions of rupees tax revenue due to the state.

 

However, Colombo chief magistrate Gihan Pilapitiya has ordered the CID to immediately investigate the assets of Krish Selvanathan and submit a report.

 

It is known that the government is faced with a serious financial crisis. The VAT amendment introduced as a solution has been suspended by the Supreme Court. A government that is prepared to impose taxes even from the people’s plate of rice is, on the other hand, giving billions of rupees of tax relief to their cronies. It should not be told here as to what sort of mischief is that. This is how the financial management of ‘yahapaalanaya’s is ‘dripping out of its clothes.’