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National Audit Office sees irregularities in EV imports, calls for probe
View(s):By Namini Wijedasa
In a scathing special report on the Labour and Foreign Employment Ministry’s controversial remittance-based electric vehicle permit scheme implemented in 2022–23 for Sri Lankans working abroad, the National Audit Office (NAO) has revealed that the facility was granted to four people who were not confirmed to have been overseas during the stipulated period and to 419 others who were abroad only for “very short periods.”
The report was presented to Parliament, but the assembly was dissolved before it was tabled. Sources familiar with its contents told the Sunday Times it provided shocking insight into how the electric vehicle permit scheme—which the NAO investigated on a reference by the Committee on Ways and Means—was “abused.”
The NAO has recommended that the bank accounts related to 1,077 permits issued—including those rejected by the Central Bank’s Financial Intelligence Unit (FIU)—be examined to verify whether any money laundering or other irregularity had occurred when permit-holding migrant workers remitted foreign currency into such accounts during the period in question, the sources said.
The NAO has also reportedly called on the government to check through the Commissioner General of Inland Revenue whether the income of companies that imported these vehicles or facilitated their import on behalf of migrant workers had been accurately disclosed and whether the correct amount of tax was paid under the Inland Revenue Act.
This was doubly important because auditors had observed that permit holders had subsequently transferred their vehicles to others. Therefore, the question arises whether earnings related to these transactions had been entered in the tax returns by the relevant people, sources said, citing the NAO report.
It is also recommended that law enforcement agencies start investigations regarding vehicles imported under the scheme but not registered so far with the Department of Motor Traffic; imported but registered belatedly; or transferred by the permit-holder to another party. This is to determine whether there had been a misuse of the permits or illegal activities carried out individually or collectively by the institutions that imported the vehicles or provided import facilities to the permit holder.
The NAO has asked for a further 64 permit files that were withheld from the audit to be presented for inspection, the sources said. If the same scheme were to continue, the responsibility for issuing permits should rest with the Import and Export Controller (as had been decided by Cabinet), the Auditor General has urged. And under any new scheme, authority should rest with the Treasury.
The office recommends disciplinary action against the respective authorities over the issuance of a circular allowing the import of electric vehicles in violation of guidelines published in the relevant Cabinet-approved committee, which described how these import permits should be issued, the sources said. The circular was signed by R.P.A. Wimalaweera, then Secretary to the Labour and Foreign Employment Ministry.
The Auditor General has also called for further investigations and, if irregularities have occurred, legal action to recover losses to the Government. While the objective of the import permit scheme had been to increase foreign worker remittances, and this objective had been achieved “to some extent,” it had been misused against a backdrop of no transparency and significant disregard for internal control systems, the NAO has concluded.
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